FMC sets up committee to look into tech-based trading issues

Forward Markets Commission (FMC) has constituted an 'Advisory Committee' to look into issues arising out of technology-enabled trading facilities like algorithmic offered on the national commodity bourses.

Currently, there are 21 commodity bourses in the country, of which six are national level commodity bourses - MCX, NCDEX, NMCE, ICEX, ACE and UCX.

"To keep pace with the technological development and to take appropriate regulatory measures, the Commission has decided to constitute an Advisory Committee on Technology," commodity markets regulator FMC said in an order.

National commodity exchanges have online trading system, risk management system and clearing and settlement system for various futures contracts.

"The use of technology is ever increasing and posing new challenges on account of innovative ways of trading like algorithmic and high frequency trades," it said.

The committee, to be headed by Bombay Stock Exchange (BSE) Managing Director Ashish Chauhan, will advise the FMC on various issues arising on use of technology, it added.

According to FMC, the committee would look into system of audit for algorithmic and high frequency trading and to suggest proper checks and balances.

It will also look into web-based trading using mobile devices and Direct Market Access (DMA), integrated market surveillance system, maintenance of data repository of trade, delivery, stock at warehouses, call recording at dealing room, trading and settlement details.

Members of the committee include a representative from SEBI, ICICI, HDFC, Commodity Participants Associations of India (CPAI) and all chief technology officers of the national commodity bourse, the order said.

The Committee will also deliberate on wider dissemination of information on trading, price and delivery information to encourage participation by farmers and hedgers.

Migration of regional exchanges to online trading system and any other issue arising from time to time would also be discussed by the committee.