The Forward Markets Commission (FMC) has increased the penalty on delivery failure, across all commodities, to 5 per cent from the current 0.5 per cent, effective November 1. | |
| S Sundareshan, chairman, said the stricter penalty was recommended by members of the commission.If the transaction between buyer and seller is not settled before 5 days of the delivery date, the penalty would automatically be imposed. |
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| "Total volume of trade has reached 7.501 lakh crore ($160 bn) during the first five and a half months (up to September 15) of this fiscal, an increase of 123 per cent in comparison with that in the full last financial year," Sundareshan said. |
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| On recommendations from Verma Committee, which has met very first time since incorporation, the FMC has decided that all members would require accredition from the FMC before December 31st of this year. |
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| "FMC will very soon issue application forms to members for accredition and all members would require membership at any cost failing which they would be unable to trade anywhere in the country," Sundareshan added. |
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| In turn, FMC will issue a Unique Membership Code (UMC) through which a member would be able to log in and enter into commodity market for trade. The second important decision is with regard to volatility in price. |
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| All three major exchanges, including Multi Commodity Exchange, National Commodity and Derivatives Exchange and National Multi Commodity Exchange, are practicing their own pricing patterns, he said adding "to bring traders on common pricing practices, the FMC has decided that if the prices are breaching the highest limit, the exchange will have to freeze trading in that commodity for 15 minutes. The trading after 15 minutes will resume at 15 per cent raised price. If at all, the commodity price is breaching further highs then the trading will be stopped for the entire day." The decision would be applicable within a week. |
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| Limits have been removed for all hedging purposes for near-month contracts but for speculators, the commission has decided not to make any change. The FMC is also considering setting up uniform margins and daily limits for all commodity exchanges. |
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| The FMC would also check the performance audit of the four leading commodity exchanges including MCX, NCDEX, NMCE and CBOT. |
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| Officers of the FMC would be monitoring the audits for which it will appoint independent professional agencies who will also be responsible for checking books of accounts of selected members of the exchange. |
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