Commexes get more time to disband sub-brokers

Commodity markets regulator FMC has for the second time extended the deadline till December 31 for exchanges to disband sub-brokers.

A sub-broker is not a member of any commodity bourse but acts on behalf of a member broker as an agent.  

Forward Markets Commission (FMC) had initially set September as deadline for commodity exchanges to discontinue with the system of sub-brokers.

The date was further extended upto November 30. "The second extension has been given to the commodity bourses to ensure smooth transition to the new system," an official with FMC said.

In place of sub-brokers, the regulator has allowed registered member-brokers of the commodity exchanges to appoint an "authorised person" (who can have access to the trading platform) with prior approval from the exchange.

In lieu of FMC' direction, leading commodity exchanges MCX and NCDEX have informed member-brokers to either discontinue sub-brokers or convert them as authorised agent by December 31.

"Members are requested to take necessary steps to ensure the said transition completed by December 31 positively," the MCX circular said. Currently, there are 18 regional and five national level commodity exchanges in the country.