The instruction was given during a meeting of High-level Financial Sector Coordination Committee, chaired by Finance Minister Barsha Man Pun, on Friday.[break]
“All the members of the committee should receive a copy of the draft regulation by Sunday morning,” a finance ministry statement says. “Another meeting of the committee scheduled for Wednesday will further discuss the matter.”
A recent report made public by the Sebon had stated that the commodities derivative market in the country was operating in an unprofessional and ad-hoc manner without complying with minimum international standards to minimize risks and protect the interest of investors.
It had also said many activities of the commodities and derivatives exchanges here went against the principles espoused by International Organization of Securities Commission, the global body of securities regulatory agencies, which is considered international standard setter for securities markets.
“To regulate the sector, a directorate should be immediately established under Sebon,” the report said.
Although the country is yet to formulate regulations on operation of commodities derivative market, a total of six companies are currently dealing with contracts from base and precious metals to crude oil and agri products such as corn, cotton, soybean and wheat.
But due to lack of regulations and regulatory body, most of these companies are operating haphazardly without adequate capital, reserves to ensure timely payment and electronic system to match orders.
It is said an investment of around Rs 250 million have gone into these exchanges. These exchanges, that have employed 1,500 youths, generated net profit of Rs 6.4 million in 2010/11 as against net loss of Rs 9.06 million recorded in 2009/10.
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