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Forward Markets Commission (FMC), the commodity markets regulator, has asked for public comments to introduce call auction on commodity markets on all agri-commodities traded on commodity exchanges.
The guidelines prescribed in the draft say that the call auction shall be for the quality and delivery centre of the commodity, which is traded and the duration will be for 20 mintues. Out of the 20 minutes, 15 minutes will be for order entry, modification and cancelling and the last five minutes will be for order matching and conformation.
The time for call auction will be from 4:40 pm to 5 pm for commodities, which will be traded till 11:59 pm. The exchange can also conduct call auction everyday and multiple times a day to arrive at a spot price.
All delivery will take place only from exchange accredited warehouses and the delivery period will be trading day plus two days and trading will not be available on holidays.
Risk management will be the same as that, which is followed by the futures' market.
Commodity exchanges are advised to put in adequate systems and issue necessary guidelines for implementing call auction.
