FMC bars 4 brokers for open position violation

The Forward Markets Commission (FMC) has suspended four brokers from trading in any of the country's commodity exchanges owing to repeated violation of open position limits.

Sushilkumar Ratanlal Khowal and BM Agro Industries have been suspended for a week between January 9 and14, 2007, while Madhya Bharat (International). and Dayal Agro Products have been suspended for three days between January 9 and 11, 2007.

Three members "" Globe Comex, Bhagyashree Commodity & Derivatives and Kunvarji Commodities Brokers "" have been issued warning.

The parties concerned are brokers of the National Commodity & Derivatives Exchange (Ncdex) and Multi Commodity Exchange (MCX). "Penalty was pronounced not on the basis of commodities in which they violated the open position limit prescribed by the regulator, but the nature of offence," said Anupam Mishra, director, FMC.

These members have violated an open position limit in a number of commodities, he added. In a press note, the regulator stated the members have been restricted from trading on all exchanges under sub-section (1) of 12(B) of the Forward Contracts (Regulation) Act, 1952. The release further said the members facing suspension from membership of all the recognised commodity exchanges and also prohibited from entering into any forward contract for the sale or purchase of goods.

Defending its action, the FMC said the regulator has taken these violations very seriously and has taken action to bring discipline in the fast growing commodity markets.

The suspensions have been ordered after giving the parties opportunities to explain their actions in writing and in person, the release added.

The regulator will continue to deal very strictly with any violations of the regulatory mechanisms being put in place by the commission, it added.