Sebi tightens noose on commodity exchanges

Tightening the noose on commodity trade, the Securities and Exchange Board of India (Sebi) has directed commodity exchanges to comply with the provisions of client code modifications in equity markets within one month.

Superseding the circulars issued by the erstwhile Forward Markets Commission (FMC), Sebi directed national and regional commodity exchanges to use the facility of client code modification only in exceptional cases.

“The objective of this provision is to streamline client code modifications across entire spectrum of trading including equity and commodity markets alike,” Sebi stated.

Sebi also advised commodity exchanges to make necessary amendments to the relevant bye-laws for cyber security to adopt a robust cyber security framework.

The regulator also asked the commodity exchanges to make provisions of cyber security wherever applicable for the commodity derivatives markets to cover governance, protection, monitoring and detection, responses and recovery, periodic audit, sharing of information, training etc. The cyber security guidelines would be made applicable for commodity exchanges from January 1, 2017.