FMC asks NMCE to check price manipulation

It has also decided to exempt registration of potato cold storages with the WDRA

The Forward Markets Commission (FMC) has directed National Multi-Commodity Exchange (NMCE), the country’s third largest commex, to closely monitor transactions on its platform to check price manipulation. “The Commission on February 20 directed NMCE ensure the trade volumes and price of the commodity derivatives are not manipulated,” FMC said in its latest report.

NMCE offers an electronic platform for futures trading in plantation, spices, foodgrains, metals, oil seeds and their derivatives. FMC, in response to a request made by leading bourse MCX, has also decided to exempt registration of potato cold storages with the Warehousing Development and Regulatory Authority for the current season, to ensure smooth supply and efficient price discovery on the exchange platform.

Highlighting the performance of commodity futures market, the regulator said the combined turnover of commodity bourses fell by 40% to Rs 95.13 lakh crore till February of this fiscal, from Rs 157.82 lakh crore in the year-ago.

There are 17 commodity exchanges in the country, of which MCX, NCDEX, NMCE, ICEX, ACE and UCX operate at national level.

As per FMC data, turnover from bullion dropped by 44% to Rs 40.83 lakh crore during April-February period of this fiscal, from Rs 73.26 lakh crore in the year-ago.

Similarly, the business from energy items fell by 32% to Rs 23.39 lakh crore from Rs 34.41 lakh crore, while turnover from metals like copper declined by 45% to Rs 16.46 lakh crore from Rs 29.95 lakh crore in review period.

The turnover from agri-commodities also declined by over Rs 14.44 lakh crore till February of this fiscal, as against Rs 20.20 lakh crore in the same period last year.

Experts attributed fall in turnover to sluggish trade participation especially after imposition of the commodity transaction tax and the Rs 5,500 crore payment crisis at NSEL, a sister concern of MCX.