Settle arbitration claims upto Rs 10 lakh : FMC to commexes

The move aims to strengthen IPF in commodity futures market

The Forward Markets Commission (FMC) has directed commodity exchanges to settle traders’ arbitration claim of upto Rs 10 lakh effective immediately. Until now, arbitration amount was fully deposited by members and clients to commodity exchanges which the latter used to accrue in investor protection fund (IPF) account.

The commodity derivatives market regulator in a circular said, “To strengthen IPF in the commodity futures market and to ensure expeditious redressal of the clients trading grievances in a cost-effective manner, the commission has decided that the clients should not be charged any fee or asked to make any deposit with the exchange of the amount of their claim or counter claim is upto Rs 10 lakh. Such expenses, therefore, should be borne by the commodity exchanges concerned.”

Today clients of the members of commodity exchanges are required to pay fee and/or make deposit with the exchanges for making any reference of their unresolved dispute with member of the exchange to arbitration.

“There has been a sharp increase in the cases of investor grievances in the commodity futures market over the years,” the circular said without specifying any further details.