The Securities and Exchange Board of India is looking to grant unified licence to brokers and clearing members for operating in commodity derivatives as well as equity markets.
SEBI board is likely to discuss a proposal to this effect next week, sources said.
To enable the integration, SEBI may amend norms pertaining to stock brokers and securities contract regulations.
Under the proposal, a stock broker or clearing member dealing in the securities market should be allowed to buy, sell or deal in the commodity derivatives without setting up a separate entity and vice-versa, sources said.
The move is expected to benefit investors, brokers, stock exchanges and SEBI as there are many commonalities between the two markets in terms of trading and settlement mechanism, risk management, and redressal of investor grievances.
The unified entity offering intermediation across asset classes will provide for efficiency of capital use to investors and enhance the value to the overall financial services ecosystem in the Indian securities market.
Besides, it is expected to increase economic efficiency in terms of meeting operational and compliance obligations at the member level, potentially resulting in ease of doing business.
Also, the integration of brokers in equity and commodity derivatives markets may help in widening market penetration and facilitate effective regulatory oversight by stock exchanges and SEBI.
Earlier, Finance Minister Arun Jaitley in his budget speech for 2017-18, had announced that the “commodities and securities derivative markets will be further integrated by integrating the participants, brokers, and operational frameworks”.