The Forward Markets Commission (FMC) would not allow new exchange traded funds (ETFs) in silver till regulatory disputes are resolved.
“ETFs should generally be traded in the commodity exchanges and we think the gold ETF traded on the stock markets is not right. And till the issue is resolved we (Securities and Exchange Board of India (SEBI) and FMC) have decided to keep a cap on floating new ETFs, like silver,”
While gold ETFs have been regulated by SEBI since its inception in 2007, the FMC believes it should monitor it, as the underlying asset is a commodity.
The issue is likely to be resolved once the Bill amending the Forward Contracts Regulation (FCR) Act is passed and FMC gets enough powers and its chairman will find place on the SEBI board and SEBI chairman on the FMC board. “The FCR is pending with the standing committee and is likely to be tabled in the winter session of Parliament,” Mr. Khatua said.
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