The SEBI-FMC merger (regulatory convergence) has been a unanimous recommendation of four different committees since the early 2000s.
It was also discussed by two parliamentary committees (in 2006 and 2011) which discussed the amendment of the Forward Contracts (Regulation) Act or FCRA — the main statute governing commodity derivatives in India. The earliest among them was the Wajahat Habibullah Committee which submitted its report in May 2003. Set up to study the merger of FMC and SEBI, it recommended convergence at four different levels — brokers, ministries, regulators and exchanges with various options within these levels.
Its final recommendations included full autonomy to FMC, correction of market distorting government policies, such as minimum support price, APMC Act, and differential taxation, among others. Echoing the sentiment, the Percy S Mistry Committee set up to study the feasibility of making Mumbai an International Financial Centre in 2007 said that separate regulators for equities and commodities damaged India in three ways. One, it reduced competition; two, it resulted in the loss of economies of scope and scale; and three, it led to a corrosive political economy. Named ‘A 100 small steps’, the Raghuram Rajan Committee report on Financial Sector Reforms unveiled in 2009 recommended that SEBI should be entrusted with the responsibility of supervising organised trading of equities, corporate debt, government bonds, currencies, commodities, and other kinds of products.
Finally, the BN Srikrishna Financial Sector Legislative Reforms Commission, or the FSLRC recommendations, mooted seven agencies for seven different activities. These included RBI for monetary policy and payments, all other regulators — SEBI, FMC, IRDA, and PFRDA — merged into one as a unified financial authority, a single appellate authority, a single disputes resolution authority, among others.