The government on Wednesday directed commodity exchanges to divest foreign equity exceeding the permitted ceiling of 49 per cent by June 30, 2009.

According to guidelines for foreign investment in commodity exchanges, a composite ceiling of 49 per cent was allowed, comprising 23 per cent under Portfolio Investment Scheme and 26 per cent under FDI Scheme.

However, some of the existing commodity bourses had foreign investment above the permitted level.

"The commodity exchanges would be required to divest foreign equity equal to the amount by which the cap was being exceeded," an official statement said.

These exchanges have been allowed a transition, complying and correction time till June 30, 2009, to comply with the guidelines, it said.

It further noted that commodity exchanges would have to submit compliance report on foreign investment and details of equity structure to the department of industrial policy and promotion, department of consumer affairs, foreign investment promotion board, the Forward Market Commission and Securities and Exchange Board of India.

Non-compliance would be a violation under Foreign Exchange Management Act, 1999, it added.