Business Standard

FMC asks commexes to credit penalties to investor protection fund by March 31

Related News

The Forward Markets Commission (FMC) has asked commodity exchanges to deposit penalty amount collected by them in (IPF) account before March 31 and submit their individual reports to the derivatives markets regulator by April 10.

In a directive to commexes, the regulator said, “The penalties collected by the exchange with effect from April 1, 2006 should be transferred to the IPF account by March 2012. The compliance in this regard may be reported to the Commission by April 10, 2012.”

“The amount collected in this account will help spend on awareness programmes, organising seminars and other means of traders’ education,” said Naveen Mathur, associate director of Angel Broking. The regulator issued the first such guideline in July 2006 and directed comexes to deposit all penalties to the IPF account. Early last month, had asked exchanges to register IPF trust mandatorily by the end of the current financial year.

In the absence of proper guidelines from the regulator, the three national level commodity exchanges, including the Multi Commodity Exchange, the National Commodity & Derivatives Exchange and the National Multi Commodity Exchange, were considering penalties collected through any means as an income. But, with the issuance of IPF guidelines in July 2006, exchanges started treating the penalty amount as a separate fund for protecting investors’ interest. But, the amount was not fully credited to the IPF account until now.

Exchanges, according to trade sources, have collected around Rs 20 crore and deposited the sum in their respective company accounts until February 2007, when FMC reiterated its stand. Faced with the extreme efforts put in by exchanges to collect penalties, they had pleaded with the regulator to consider the penalty amount as a source of income for the exchange. The plea was, however, rejected. Moreover, FMC has allowed exchanges to deduct 10 per cent from the collected sum as an administrative cost.

Since the penalty provision was incorporated in exchange guidelines for defaulters, the comexes continued to collect penalties according to the tune of violation of exchange guidelines from traders and deposit the same into their company accounts.

Read more on:   
|
|
|
|
|
|
|

FMC asks commexes to credit penalties to investor protection fund by March 31

“The amount collected in this account will help spend on awareness programmes, organising seminars and other means of traders’ education,” said Naveen Mathur, associate director of Angel Broking. The regulator issued the first such guideline in July 2006 and directed comexes to deposit all penalties to the IPF account. Early last month, FMC had asked exchanges to register IPF trust mandatorily by the end of the current financial year.

The Forward Markets Commission (FMC) has asked commodity exchanges to deposit penalty amount collected by them in (IPF) account before March 31 and submit their individual reports to the derivatives markets regulator by April 10.

In a directive to commexes, the regulator said, “The penalties collected by the exchange with effect from April 1, 2006 should be transferred to the IPF account by March 2012. The compliance in this regard may be reported to the Commission by April 10, 2012.”

“The amount collected in this account will help spend on awareness programmes, organising seminars and other means of traders’ education,” said Naveen Mathur, associate director of Angel Broking. The regulator issued the first such guideline in July 2006 and directed comexes to deposit all penalties to the IPF account. Early last month, had asked exchanges to register IPF trust mandatorily by the end of the current financial year.

In the absence of proper guidelines from the regulator, the three national level commodity exchanges, including the Multi Commodity Exchange, the National Commodity & Derivatives Exchange and the National Multi Commodity Exchange, were considering penalties collected through any means as an income. But, with the issuance of IPF guidelines in July 2006, exchanges started treating the penalty amount as a separate fund for protecting investors’ interest. But, the amount was not fully credited to the IPF account until now.

Exchanges, according to trade sources, have collected around Rs 20 crore and deposited the sum in their respective company accounts until February 2007, when FMC reiterated its stand. Faced with the extreme efforts put in by exchanges to collect penalties, they had pleaded with the regulator to consider the penalty amount as a source of income for the exchange. The plea was, however, rejected. Moreover, FMC has allowed exchanges to deduct 10 per cent from the collected sum as an administrative cost.

Since the penalty provision was incorporated in exchange guidelines for defaulters, the comexes continued to collect penalties according to the tune of violation of exchange guidelines from traders and deposit the same into their company accounts.

image

Read More

CTT blow for MCX, others

However, Budget seen as positive, overall, for agri sector

Recommended for you

Quick Links

Market News

Markets snap two week winning streak; defensives weigh

Broader markets outperform as investors buy mid-cap and small-cap shares at attractive valuations

TCS scrip: Analysts positive despite revenue miss

Management confidence on achieving strong growth in FY16 a key reason for bullishness

VRL Logistics IPO subscribed 74 times

Issue sees more than 1.2 billion bids worth Rs 25,000 crore, on strong demand from all investor categories

Copper to remain subdued on rising production, falling demand

LME inventories on the rise since last fall of almost 200,000 tonnes last year

MFs shuffle portfolios; ITC, TCS & ONGC out of top picks

HDFC Bank pips ICICI Bank, emerges as most sought after stock

 

Back to Top