SEBI bars FTIL from holding shares in stock exchanges
- Commodity future exchange deal in physical commodity underlying and stock exchange deal the securities underlying in the stock exchange, both discharge similar function and agreements.
- Both requires systems and processes like trading platform,clearing and settlement(default settlements pose systemic risk to the respective markets).
- The regulatory objective exchanges are same as investor protection, market integrity, transparency, fairness and governance are concerned.
- They are connected through common stakeholders and flow of finance.
- The two exchanges and clearing corporation are market infrastructure institutions of the financial markets and they need the same level of integrity and governance standards.
- According to SEBI a person not fit and proper to hold shares in commodity future exchange cannot hold shares in stock exchange and the clearing corporation because he poses same danger to interest of securities in both the markets that require integrity.
- The declaration of FTIL (Financial Technologies (India) Ltd) as ‘not fit and proper’ by FMC has direct bearing on the securities market.
- Commodity future exchange
- Stock Exchange
- Forwards Market Commission (FMC)