To improve corporate governance in commodity exchanges after the NSEL fiasco, regulator FMC today ordered six national commodity bourses to give shareholders a broader representation on their board.
Issuing a fresh guidelines, the Forward Markets Commission (FMC) said the anchor investor should have representation on the exchange's board proportionate to the shareholding.
The stake of anchor investor should not be more than 26 per cent after five years of an exchange's operation.
The representation of stock exchange, commodity exchange, government firms, banks and public financial institutions, cooperative socieities dealing in agriculture and warehousing companies should not less than one half of the total number of shareholders directors. "Any of these shareholders shall not have more than one representative on the Board."
The representation of other classes of shareholders on the Board should be as per their eligibility for appointment on the Board.
The FMC has issued these guidelines "with a view to having a broad-based representation of all classes of shareholders on the Board of Directors of the Exchange to strengthen corporate governance."
The regulator directed six national commodity bourses -- MCX, NCDEX, NMCE, UCX and ACE -- to incorporate these guidelines by September 30, this year.
Exchanges are asked to submit a proposal to FMC by September 30 seeking approval of the appointment of shareholder directors keeping in view these guidelines.
After emergence of a payment crisis at National Spot Exchange Ltd (NSEL), the FMC has been taking number of steps to ensure such defaults does not occur on the commodity futures exchanges.
NSEL is facing the problem of settling Rs 5,600 crore due to 13,000 investors after it closed down its operation on July 31 following violation of certain norms.