Restrictions on Algo, colocations, PMS continued
Tuesday issued several circulars, replacing those of the erstwhile commodity market regulator Forward Markets Commission (FMC). Last year, FMC ceased to exist after being merged with Sebi. While warehousing norms have been tightened significantly, other circulars include algo trading and co-location facilities for commodity exchanges. According to one of the circulars, portfolio management services would not be permissible in the commodity derivative market.
Under the norms, warehouse service providers (WSP) will be corporate bodies with subscribed share capital of Rs 10 crore. An accredited WSP would have a minimum net worth of Rs 25 crore for multi-commodities and Rs 10 crore for a single commodity. The commodity exchange would have to ensure that the WSP, its promoters and key management personnel are “fit and proper” to carry out the business. All WSPs should also be approved by the Warehousing Development and Regulatory Authority and those which have so far not obtained such registration, should be helped with getting it within six months. However, owned warehouses proposal as per draft norms seems to have been dropped by the Sebi, giving a major relief.
The final norms have been put in place after taking into consideration views of all stakeholders. The regulator had issued draft rules in this regard in June. The commodity derivatives exchanges currently use the polling methodology for determining spot prices. It is being reviewed with intent to improve the credibility and transparency of such process. Warehousing infrastructure and its ancillary services play a critical role in the delivery mechanism of the commodity derivatives market.
A robust and credible warehousing infrastructure is essential for an effective commodity derivatives market that can instill confidence among the market participants and other stakeholders.
“The exchange shall ensure that the WSP, promoters of WSP, assayers, key management personnel of WSPs, warehouses and assayers shall always be 'fit and proper' to carry out business of warehousing, have adequate knowledge of, and experience in generally accepted warehousing and handling practices for commodities, and are competent and willing to operate such a warehouse,” Sebi said in a circular.
The regulator said that for accreditation of WSP, the commodity exchanges will follow a transparent process by issuing open advertisements in leading newspapers and putting them up on the exchange website. A WSP can be accredited with more than one exchange.
Besides, the exchange would not make it mandatory that its WSP cannot provide services to another bourse. Sebi said that WSP promoters should be responsible entities of repute and have been in the business of public warehousing for at least three years.
They should have adequate knowledge of and experience in generally accepted warehousing and handling practices for commodities.
WSP and its promoters should not have any record of serious violation of laws or being expelled by any exchange in the last three years.
The accreditation of a WSP will be subject to renewal after a period of three years unless any expulsion proceedings are pending against it.
Business Standard, New Delhi, 28 September 2016
Tuesday issued several circulars, replacing those of the erstwhile commodity market regulator Forward Markets Commission (FMC). Last year, FMC ceased to exist after being merged with Sebi. While warehousing norms have been tightened significantly, other circulars include algo trading and co-location facilities for commodity exchanges. According to one of the circulars, portfolio management services would not be permissible in the commodity derivative market.
Under the norms, warehouse service providers (WSP) will be corporate bodies with subscribed share capital of Rs 10 crore. An accredited WSP would have a minimum net worth of Rs 25 crore for multi-commodities and Rs 10 crore for a single commodity. The commodity exchange would have to ensure that the WSP, its promoters and key management personnel are “fit and proper” to carry out the business. All WSPs should also be approved by the Warehousing Development and Regulatory Authority and those which have so far not obtained such registration, should be helped with getting it within six months. However, owned warehouses proposal as per draft norms seems to have been dropped by the Sebi, giving a major relief.
The final norms have been put in place after taking into consideration views of all stakeholders. The regulator had issued draft rules in this regard in June. The commodity derivatives exchanges currently use the polling methodology for determining spot prices. It is being reviewed with intent to improve the credibility and transparency of such process. Warehousing infrastructure and its ancillary services play a critical role in the delivery mechanism of the commodity derivatives market.
A robust and credible warehousing infrastructure is essential for an effective commodity derivatives market that can instill confidence among the market participants and other stakeholders.
“The exchange shall ensure that the WSP, promoters of WSP, assayers, key management personnel of WSPs, warehouses and assayers shall always be 'fit and proper' to carry out business of warehousing, have adequate knowledge of, and experience in generally accepted warehousing and handling practices for commodities, and are competent and willing to operate such a warehouse,” Sebi said in a circular.
The regulator said that for accreditation of WSP, the commodity exchanges will follow a transparent process by issuing open advertisements in leading newspapers and putting them up on the exchange website. A WSP can be accredited with more than one exchange.
Besides, the exchange would not make it mandatory that its WSP cannot provide services to another bourse. Sebi said that WSP promoters should be responsible entities of repute and have been in the business of public warehousing for at least three years.
They should have adequate knowledge of and experience in generally accepted warehousing and handling practices for commodities.
WSP and its promoters should not have any record of serious violation of laws or being expelled by any exchange in the last three years.
The accreditation of a WSP will be subject to renewal after a period of three years unless any expulsion proceedings are pending against it.
Business Standard, New Delhi, 28 September 2016
I'm really inspired together with your writing skills and also with the layout for your weblog. Thanks for sharing this blog here. Warehouse Facility Bangalore
ReplyDelete"Thanks for sharing these tips! If you’re planning to move into your dream home Gurgaon Packers and Movers ensures a smooth and hassle-free relocation. Visit us for more info!"
ReplyDelete
ReplyDeleteLooking for reliable Packers and Movers in Anand Vihar, Delhi? Sindoor Packers and Movers specialize in local and long-distance relocations with complete care and responsibility. We handle everything from packing to unloading with precision and dedication.
Sindoor Packers and Movers provide trusted Storage Services in Meerut for safe and secure storage of your belongings. Our facilities ensure protection from damage and theft, offering flexible short-term and long-term options. Choose Sindoor Packers and Movers for hassle-free and reliable storage solutions in Meerut.
ReplyDeleteSindoor Packers and Movers provides dependable Courier Services from Gurgaon to Guwahati,, ensuring fast, secure, and cost-effective delivery of packages, documents, and goods. With real-time tracking, professional handling, and timely delivery, we guarantee customer satisfaction. Choose us for smooth, reliable courier services connecting Gurgaon and Guwahati with care and efficiency.
ReplyDeleteFor quick, safe, and professional House Shifting Services in Delhi, trust Grewal Transport Packers and Movers, known for their expert team and commitment to customer satisfaction.
ReplyDeleteInvest smartly with Sindoor Property Real Estate as we present premium plots for sale in Dwarka Expressway, surrounded by fast-growing infrastructure, top schools, hospitals, and commercial hubs. Secure your piece of land today and enjoy appreciation in value while building a future on your terms.
ReplyDeleteWith a strong reputation as top Real Estate Dealers in Pataudi, Sindoor Property Real Estate takes pride in offering genuine advice, legal transparency, and full support. Whether you're buying your first home or your next investment, we ensure a secure and satisfying real estate experience.
ReplyDelete