FMC to expand participation in commodity futures
Mumbai, Aug 9: Forward Markets Commission (FMC) has initiated steps to expand participation in commodity futures markets and create awareness about the practices prevalent there.
After a meeting of representatives of Trade and Manufacturers' Associations, Chambers of Commerce and various Commodity Boards, FMC Chairman S Sundarshan told mediapersons here today that ''The two important initiatives in this area are conducting awarness programmes and holding training programmes for various segments of the market. Awareness programmes are conducted by FMC in coordination with the regional and national exchanges. FMC also organises training programmes for the staff of the exchanges and also various stakeholders of the market. This year, 2006-07, FMC has tied up with various training institutions for training various segments of the market such as National Institute of Bank Management, Pune, Institute of Rural Management, Anand, Indian Institute of Manangement, Bangalore, and National Institute of Agriculture Management, Jaipur.'' He further stated that FMC has been keeping a close watch on the futures trading, intervening immediately whenever there has been a crisis in the market. For example, the intervention in the urad contract in January this year.
Mr Sundarshan said the FMC on a daily basis monitors the position of the prominent operators and the exchanges have been directed to get the positions of members/clients reduced whenever there had been instances of violations. The specific regulatory intervention made by FMC from time to time in respect of sensitive/essential commodities are such as limit on open position were reduced to prevent any possibilities of cartelisation and sqeeze.
Additional/special margins were imposed to reduce leverage of the participants in order to ensure that such leverage was not used to accentuate the price trend in a particular direction. Limits on daily price fluctuations were reduced. Commodity futures markets in India are well regulated and they are having beneficial impact on the commodity economy, he explained.
Future trading in commodities had registered a phenomenal growth in the last two years with total value of trading during 2005-06 at Rs 21.34 lakh crore as compared to Rs 5.76 lakh crore during 2004-05. The total volume of trading during the first four months (April-July) was Rs 12.61 lakh crore, he added.