otherwise not prohibited under section 17 of the Forward Contracts (Regulation) Act, 1952will be converted into recognition in specific commodities as may be listed in the recognitionnotification and that too for specified period which will need to be renewed from time to time.The said period of one year may be extended by the Forward Markets Commission inexceptional cases on genuine grounds for a further period not exceeding one year.(
“National Commodity Exchange” means a demutualised CommodityDerivative Exchange with an independent professional management, an electronic tradingplatform, all India operations and recognized under section 6 of the Forward Contracts(Regulation) Act, 1952 for trading in all commodities notified u/s 15 or otherwise notprohibited for trading u/s 17 of the said Act.)This issue has been under the consideration of the Government for some time and itis now pleased to issue the following guidelines in this behalf.
3. Government has powers to issue new guidelines. Guidelines for conversion ofRegional Exchanges into National Commodity Exchange needs to be spelt out. This issuehas been under the consideration of the Government for some time back and after revisitingand reviewing the current ownership structure of the existing National CommodityExchanges, the following Guidelines are laid down:3.1 All National Commodity Exchanges should have a paid up equity capital of atleastRs. 50 crore and Networth* of atleast Rs. 100 crore as a going concern and on acontinuous basis.(* Note: Networth is defined in the enclosed
)3.2 The total shareholding of the class of entities mentioned below should not be lessthan 26%:i. Government Companies, as defined in the Companies Act 1956;ii. Banks and Public financial institutions;iii. Government Companies as defined in the Companies Act, 1956,Cooperative Societies as defined in the Societies Act and Federations