Professional Documents
Culture Documents
The authors acknowledge the very helpful comments from the reviewer.
Views expressed are personal.
Nilanjan Ghosh (nilanjanghosh@orfonline.org) is with the Observer
Research Foundation, Kolkata, and the World Wide Fund for Nature,
India; Kushankur Dey (kushankurd@iimahd.ernet) is with the Indian
Institute of Management Ahmedabad.
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never directly exposed to brokers and members of an exchange. It used to do that through the exchanges. Therefore,
in the changed regime after the merger, the optimum combination of two different types of skill sets and experience will
infuse more rationality to the trade by offering a broad-based
yet effective platform.
Rationale for Convergence and Opportunities
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The effect of the SEBIFMC merger as a case of regulatory convergence may be amplified in the regulatory architecture in
commodities markets, among others, in productmarket innovation, surveillance and risk management and conflict management of the regulator and exchanges/members and protection for customers (Dey 2015b). However, the implications of
the SEBIFMC merger need to be examined from an economic
and regulatory standpoint. Regulatory harmonisation in terms
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An autonomous regulator may bring about certain guidelines and terms and conditions on the functioning of the
board. Incidentally, the FMC brought about quite a few guidelines on the functioning of exchange boards.
On the other hand, since agency problem seems to have surfaced in earlier regulatory structures, the new regulator being
a principal will impose a set of checks and balances on activities of exchanges (agents) on market monitoring, surveillance,
and risk management. This might help regain market integrity, trust and completeness (Sahadevan 2012).
The inclusion of independent directors (not in relation to
promoters or members of family-run business entities) by the
SEBI might be viewed as a positive stroke to regulatory
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It is yet to be seen whether this move towards regulatory convergence needs to be typified as a one-off incident or as the
initiation of a process of regulatory convergence, as is the
worldwide trend and the recommendation of the FSLRC. Only
time can say. Be that as it may, there are merits from various
perspectives in the move to regulatory convergence, as illustrated above. Yet, the challenges are also many. As such, onesize-fits-all might not work for the commodity segment and
the new regulator needs to be cautiously optimistic in market
regulation and management of exchanges and market participants. Blanket application of stock exchange practices might
not enhance the efficacy of commodity exchanges. It has to
embrace the good features already prevalent in commodity
market regulatory frameworks and the proclivity of exchanges product innovations. Rather, if a greater regulatory
convergence is envisaged bringing in other market regulators
as per the FSLRC recommendations, one needs to apply regulatory norms according to the needs of the market concerned so
as to bring about product innovation, process innovation and
safeguarding the interests of investors.
The FMC, within the ambit of the FCRA, has done its bit to
the extent possible. The SEBI has shown exemplary performance as the regulator of securities markets up to now. With the
two coming together, the possibility of good results exists. At
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Vijay K Nagaraj
Protests and Counter Protests: Competing Civil Society Spaces in Post-war Sri Lanka
Harini Amarasuriya
Devaka Gunawardena
Chiranjibi Bhandari
Dolly Kikon
GIulia Minoia, Wamiqullah
Mumtaz, Adam Pain
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