'No clearance for ADAG, Kotak comex if interests conflict'
Foward Markets Commission say corporate like Anil Ambani-led Reliance and Kotak will have to wait before entering the commodity bourse arena.business Updated: Sep 14, 2008 14:31 IST
Foward Markets Commission on Sunday said corporate like Anil Ambani-led Reliance and Kotak will have to wait before entering the commodity bourse arena, as it is still working on preventing conflict of interest that may arise from brokers turning exchange promoters.
"I do not want this market to be a gambling place," FMC Chairman B C Khatua told PTI in an interview, adding that the guidelines on conflict of interest may take a month or two or more to be finalised.
He said the regulator was well aware of the danger of conflict of interest and clearances would not be given to Reliance and Kotak till there was clarity on the issue.
"We must clearly understand the legitimate role of speculation in futures market... The legitimate speculators are a well regulated risk-taker, a risk transferor and then a transferee, without whom market cannot function... But, risk transferers can not transfer risk to themselves," he noted.
Khatua said that there was nothing to worry about a big corporate house owning an exchange "except that there should not be conflict of interest between its role as the owner and its other roles, if any."
It would be deemed as conflict of interest if an owner also has a broking bouse and it holds direct position in the market and owns the exchange, he explained.
Reliance and Kotak are the only two applications that FMC is currently holding for approval, Khatua said.