FMC gives bourses extra time to register warehouses with WDRA

Commodity markets regulator FMC has given the six national commodity bourses three months more time till March 2014 to register their warehouses with WDRA to ensure quality and quantity of the produce lying with them.

For better regulation of warehouses, FMC had asked the national commodities bourses -- MCX, NCDEX, NMCE, ICEX, ACE and UCX -- to register their warehouses with the Warehousing Development & Regulatory Authority (WDRA) and obtain the accreditation certification before December 31.

Since the registration process will take some more time, the Forward Markets Commission (FMC) said it has "decided to extend the time frame till 31st March 2014 for the existing accredited warehouses of the exchanges."

It has also been decided that the exchanges can accredit new warehouses which have applied or apply for registration to WDRA by December 31, 2013, it said in a directive to bourses.

WDRA regulates warehouses and the receipts therein for orderly development of the business.

The FMC said that more time has been given to the exchanges because they are experiencing difficulties in handling physical deliveries due to non-availability of WDRA-accredited and registered warehouses at certain locations as the process of registration with WDRA will take some time because of various procedural and logistics issues.

Also, the inadequate number of warehouses at certain delivery centres has adversely affected the efficacy of price discovery process and trading in certain commodities, it said.

Following the directive, leading agri-commodity bourse NCDEX said it has registered 40 out of total 500 approved warehouses with WDRA. While 250 more have applied for registration.

The regulator has taken the initiative to strengthen warehousing facilities in the commodity futures market after the NSEL payment crisis deepened.

FMC is overseeing the payment of Rs 5,600 crore dues by the National Spot Exchange Ltd (NSEL) to investors after the exchange shut its business due to violation of some rules, like allowing trade without having stocks.