To improve transparency and credibility to the spot price polling mechanism in commodities, Sebi has proposed to make it compulsory for exchanges to accredit an independent polling agency and bring such agency under its purview.
The capital markets regulator has come out with a consultation paper on ways to enhance efficiency in the polling methodology adopted for determination of spot price for commodities.
The availability of correct and transparent information about the spot price of any commodity is essential for arriving at the expected futures prices of the commodity.
This is necessitated as any divergence in the linkages between the two prices could lead to adverse impact on the price in two markets —derivatives and spot, the regulator noted.
Under the consultation paper, Sebi has proposed to make it compulsory for exchanges to accredit an independent polling agency for spot price polling, which can do the job independently for all the exchanges on a specific commodity.
“This is necessitated because of the fact that the universe of the polling participants is limited and the same participants are being called many times in a day especially where same contract is listed on more than one exchange or the same participant deals in multiple commodities.
“As a result, many a times these polling agents do not answer the calls from the exchanges,” the regulator said in the paper issued yesterday.
The Securities and Exchange Board of India (Sebi) has proposed for uniformity in approach amongst the exchanges on the process of price polling methodology.