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FMC to cut anchor investors to size in commodity bourses

A minimum 51 per cent equity of the stock exchanges will be held by investors at large.

Written by George Mathew | Mumbai | Published: October 29, 2013 2:52:41 am

The Forward Markets Commission,the regulator for commodity exchanges,is considering a proposal to reduce the stranglehold of anchor investors on exchanges in the wake of the National Spot Exchange Ltd (NSEL) settlement crisis.

After directing all commodity exchanges to induct 50 per cent independent directors on their boards,FMC is now planning to broadbase the shareholding pattern in commodity exchanges so that anchor investors don’t indulge in mismanagement and influence the exchange operations.

“Anchor investors are now allowed to hold up to 26 per cent of the equity stake. That is being reviewed by us to bring it down to 15 per cent,” FMC chairman Ramesh Abhishek said in an interview to The Indian Express.

“The existing policy on shareholding pattern was last made in 2009. We are reviewing the regulations. There are suggestions that private ownership,the concept of anchor investors in exchanges should be reviewed. The ownership should not be so large that it could create problems. We are reviewing all the limits and sub-limits. Some of the smaller limits are very restrictive… that you can’t take more than 5 per cent holding,” Abhishek said.

Effectively,commodity bourses are likely to follow the ownership pattern formulated by Sebi for stock exchanges. Under Sebi rules,stock exchanges should have diversified ownership and no single investor is allowed to hold more than 5 per cent except the stock exchange,depository,insurance company,banking company or public financial institution,which may hold up to 15 per cent.

A minimum 51 per cent equity of the stock exchanges will be held by investors at large.

Financial Technologies (FTIL),promoted by Jignesh Shah,holds 26 per cent stake in Multi Commodity Exchange (MCX). FTIL is also the dominant shareholder in NSEL,holding 99,99 per cent its stake. NSEL holds 60.88 per cent stake in Indian Bullion Market Association (IBMA) which came into the spotlight after the NSEL crisis surfaced.

In Ahmedabad-based NMCE,promoter Kailash Gupta was holding around 30 per cent stake. FMC directed the exchange to bring it down to 26 per cent. Anil Ambani bought 26 per cent stake of Indiabulls in Indian Commodity Exchange (ICE) two years ago. The Kotak group owns over 26 per cent in Ace Derivatives & Commodity Exchange.

FMC,now under the finance ministry,had recently asked six national commodity bourses to give shareholders a broader representation on their boards in order to improve the corporate governance structure.


* FTIL promoted by Jignesh Shah owns 26% in MCX and 99.99% in NSEL

* Kailash Gupta,promoter of NMCE held 30% stake which FMC directed to be cut to 26%

* Anil Ambani owns 26% in ICE

* Kotak group owns over 26% in Ace Derivatives and Commodities Exchange

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