Weekend Economists MLK Remembrance January 20, 2014

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19. India Said to Plan Merging Regulators After Bourse Collapse

http://www.bloomberg.com/news/2014-01-20/india-said-to-plan-combining-regulators-after-exchange-collapse.html

India is planning to combine the stock and commodities market regulators after a payment crisis led to the collapse of the nation’s biggest spot exchange, three people with direct knowledge of the matter said.

The Finance Ministry is working on the proposal, the people said asking not to be identified as they were not authorized to talk to the media. The merger of the Securities and Exchange Board of India and the Forward Markets Commission will boost oversight of the nation’s $2.8 trillion commodities market and prevent failures at exchanges, they said.

Regulators globally are expanding scrutiny of markets from metals to currencies, tightening rules on capital buffers and cracking down on crimes from money laundering to interest-rate rigging. A merger of the two regulators will be the biggest overhaul of commodity markets regulation and follows the suspension of trading on the National Spot Exchange Ltd., a platform for buying and selling everything from gold to sugar.

“We need stronger regulatory oversight in commodities to protect small investors,” Andrew Holland, chief executive officer at Ambit Investment Advisors Pvt., said in an interview on Jan. 9. “If they can close the loop after the NSEL episode, investors will be fine.”