The Forward Markets Commission (FMC) and the futures commodity exchanges have asked Refco (India) Pvt to limit its commodities exposure at the current level in the wake of its parent's financial problems in the US, the head of the company said on Monday. | |
| "We are still under the advice of all the exchanges to limit our exposure at the current levels," Vineet Bhatnagar, managing director, Refco (India), said after a meeting with the FMC officials. |
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| Last week, the New York-based Refco's business fell into financial mess when its management revealed that it had fudged bad debts. |
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| In India, officials at the company's securities and commodities operations said they would be untouched by their parent's troubles. |
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| Bhatnagar said he had briefed the FMC officials on the overseas developments in the Refco group and on the steps the company had taken in India to safeguard the interests of its clients. |
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| "We briefed the regulator on our safeguards in the interest of our business continuity both from the point of view of liquidity and also corporate ring-fencing," he said. |
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| Bhatnagar said that the board of Refco-Sify Securities India Pvt. Ltd, the Indian securities entity of Refco Inc, has decided it will "insulate" the company from any "adverse impact" in the Refco group. |
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| For its part, the FMC is watching the developments in Refco and has advised the exchanges to be careful against any possible financial irregularity arising out of Refco's overseas woes. |
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| "Refco has very comfortable deposits on the exchanges," said Anupam Mishra, director at FMC. "Their exposure on the two major commodity exchanges is well within their deposit level." |
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| Mishra said Refco has a deposit of around Rs 230 million at the National Commodity and Derivatives Exchange and around Rs 150 million on the Multi Commodity Exchange of India (MCX). |
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| A senior MCX official said the exchange wasn't worried about Refco's trading on it. |
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| "The exchange's systems are designed for all kinds of eventualities," said Joseph Massey, deputy managing director of MCX. "While there is a concern about the big global player's problem overseas, there is no cause of worry here." |
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