The Forward Markets Commission will convene a meeting of 21 regional exchanges in the country to prepare a plan of action for their revitalisation, commission's chairman B C Khatua said.
Can disparity in futures prices at two prime commodity exchanges in the country hold pepper trade to ransom?
The move will allow regional bourses to demutualise and go national. Currently, there are three national and 19 regional commodity exchanges in India. FMC is likely to finalise the norms for demutualisation and upgrade of regional exchanges in the next fortnight. The regulator may grant the regional exchanges a period of 3-5 years to raise their networth to Rs 100 crore.
A parallel system of futures trading in commodities, operating outside recognised commodity exchanges, better known by its colloquial epithet Dabba, has been thriving unchecked and is believed to be now generating bigger trading volumes than the regular exchanges.
If the Cabinet approves the long-pending Forward Contracts (Regulation) Amendment Bill, the regulator will be empowered to levy penalties besides getting the powers to approve options trading. In addition, it will pave the way for the entry of institutional players like mutual funds and foreign institutional investors into the trading arena, which many believe will deepen the markets. Similarly, the FMC will be able to decide on who can set up commodity exchanges.
In a reiteration of its stand, Forward Markets Commission (FMC) chief B C Khatua said FMC is open to foreign participation in the market in a limited way and will talk to the Centre in this regard.
In its order that rejected a proposal by NCDEX to slash the transaction charges in its evening session of trade, FMC said the exchange's settlement guarantee fund has fallen to meagre Rs.5.05 lakh at the end of calendar year 2008. Performance audit done by the auditors at the behest of FMC shows that the exchange also earned an interest of Rs.24.87 crore on this fund during March 2004 to March 2006.
The rise was on account of robust volumes in gold, silver and energy.
In an effort to boost commodity trading in the country, the much-awaited amendments to the Forward Contract and Regulations Act of 1952 will happen during the Budget session of the Parliament.
In a landmark move, India may allow its expatriates to trade in commodities. The decision is aimed at expanding the country's $750-billion futures market.
'The expeditious enactment of labour codes and strategic measures to bridge the skills jobs gap are critical.'
Forward Market Commission's recent introduction of two rules to rein in highly volatile pepper market has come in for serious criticism from traders and farmers alike.
India's largest agri commodity bourse - the National Commodities and Derivatives Exchange - plans to launch futures trading in coal soon.
The Forward Markets Commission, the apex commodity futures regulator in India, plans to collaborate with commodity organizations in other countries to strengthen its regulatory arm.
The turnover of 23 commodity exchanges rose by 57 per cent to Rs 11837.26 billion (Rs 11,83,726 crore) till May 15 of the 2010-11 fiscal as against Rs 7525.18 billion (Rs 7,52,518 crore) in the same period last year.
In September 2013, FMC was brought under the Finance Ministry.
The cryptocurrency exchanges in India have got a fresh lease of life following the bull run in Bitcoin, which briefly hit a new all-time high of more than $69,000. Siddharth Sogani, managing director of CREBACO, expects the price to cross $1,00,000 by the end of the year. This will see a sharp reversal in the Indian market, which has largely been dormant since the new tax regime was implemented in 2023.
The demand for ban on futures trading in more commodities is increasing day by day.
A single market regulator clearly has its own advantages over multiple regulators. But it is more suitable for well-developed and mature markets which are smaller in size, like the UK.
Officials in the FMC said the regulator is planning to permit active role for the state marketing federations in commodity futures trading.
India's apex commodities market regulator the Forward Market Commission (FMC) says there is no plan now to ban futures trading in any other commodity.
Four persons privy to the discussions told Business Standard that the deal is close to finalisation, and that regulator Forward Markets Commission (FMC) had been kept in the loop. Indiabulls holds 40 per cent stake in the exchange, which started operations less than a year ago.
In a significant development, India's National Commodity & Derivatives Exchange Limited on Thursday launched its futures contract for Certified Emission Reduction. Forward Markets Commission, chairman, B. C. Khatua inaugurated the launch at NCDEX Exchange Platform. The CER contract of NCDEX will be traded in multiples of one lot of 500 CERs each.
The turnover of commodity exchanges in 2006-07 financial year is likely to touch a whopping Rs 37 lakh crore (Rs 37 trillion) against just Rs 570,000 crore (Rs 5,700 billion) in 2004-05.
The commodity futures market has started losing its sheen after a stupendous growth rate of 96.05 per cent in the last financial year
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Sebi keen to attract larger number of retail investors
In what could hit trading on Power Exchange of India Ltd, the Forward Markets Commission has warned it to cease trading in contracts beyond 11 days of payment and delivery. The FMC has also advised traders to desist from trading such contracts on PXIL.
The Forwards Markets Commission has been working on preventing any possible conflict of interest a promoter of a commodity exchange may have between their roles of running the exchange and other businesses such as broking and trading. "So far, we had two rounds of meeting in this regard. We are resolving the issues and guidelines would be finalised by the end of October," said FMC Chairman B C Khatua.
Commodity futures exchanges are set for another round of equity restructuring with the Forward Markets Commission, the regulator, currently finalising guidelines that will require anchor investors to prune their equity holding to 26 per cent from the present 40 per cent after three years but before five years.
In an effort to make awareness among farmers about the benefits of Futures trade in commodities, NCDEX and Forward Market Commission jointly organised an awareness programme here recently.
Intense competition and lifting of trading ban on four agri products will help the commodity futures exchanges end 2009 with a record turnover of up to Rs 70,00,000 crore (Rs 70 trillion), up 39 per cent from last year. The total turnover was at Rs 50,33,872 crore (Rs 50.338 trillion) in 2008.
The turnover of commodity exchanges in the country dropped by seven per cent to Rs 10,14,845.30 crore (Rs 10,148.45 billion) till July 14 in the current financial year against Rs 10,92,426.40 crore (Rs 10,924.26 billion) in the year-ago period.
The Cabinet Committee of Economic Affairs is all set to announce the guidelines for FDI in commodity exchanges. Following this, the Forward Markets Commission is expected to submit the proposal for ownership structure of exchanges before the Union ministry of consumer affairs.
The turnover of 23 commodity bourses rose by 49.38 per cent to Rs 9,04,686 crore (Rs 9,046.86 billion) in August this year despite low business recorded during the month at the leading exchanges, MCX and NMCE, according to the Forward Markets Commission.
Tech giant Apple on Wednesday said it has slashed its App Store commission by half to 15 per cent for small businesses earning up to $1 million (about Rs 7.4 crore) per year on the platform. In the past, tech majors Apple and Google have been criticised for the high commissions charged from app developers. Apple, in a statement, said the new developer programme will accelerate innovation and help small businesses and independent developers propel their businesses forward with the next generation of groundbreaking apps on the App Store.
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