MCX inks pact with AFET for co-operation

Mumbai, Apr 22: Even as commodity market regulator, Forward Market Commission (FMC), has strongly advocated the participation of banks, mutual funds (MF) and foreign institutional investors (FIIs) in forward trading in commodities, the Multi Commodity Exchange of India Ltd (MCX) and the Agricultural Futures Exchange of Thailand (AFET) have signed a memorandum of understanding (MoU) to explore areas of co-operation and business opportunity of mutual benefit.

The exchanges will work with the goal of assisting and benefiting the underlying producers, end-users and investors by maximising the application of international best practices for price risk management and exchange operations, an official statement said.

''Through this association, both the exchanges will be able to glean valuable insights into each other's working areas and more importantly, learn from the other's experience. This will go a long way into making our markets more robust and accessible,'' Deputy Managing Director of MCX, Joseph Massey said.

''This is a great opportunity for AFET, which provides futures contracts in white rice, rubber and tapioca. We hope to learn a lot from MCX's experience,'' AFET President Napaporn Kurupasutachai said.

''It is very important for the growth of commodity market in India that the government should allow mutual funds, banks and FIIs,'' FMC Chairman S Sundareshan had earlier said.

As a first step in that direction, FIIs should be allowed to participate only in bullion, metal and crude commodities while banks should be permitted in agriculture commodities, he added.

UNI