| The regulator took this stern action following the recent Business Standard report, which had exposed higher-than-expected returns on investment in mentha oil trade in less than one month. FMC has also restricted an increase in open position during the five days prior to the expiry of the contracts. |
| These directions shall be applicable to all the running mentha oil contracts, including the January 2006 delivery. |
| FMC has issued these directions for immediate implementation by the Multi Commodity Exchange (MCX) and the National Commodity and Derivative Exchange, which were reported to have seen the highest volatility in spot as well as futures prices. |
| Earlier, FMC had imposed additional margins on mentha oil contracts on the MCX looking at volatility beyond expectations. |
| An additional margin of 4 per cent is levied on the members having open positions (on both 'buy' and 'sell' sides), along with the daily initial margin of 8 per cent and a special margin, if any. An additional margin of 5 per cent was levied on members having net long open position in all the contracts of mentha oil. All these margins are effective from December 31, 2005. |
| The commodity market watchdog had been closely interacting with the MCX particularly towards the close of the contract. The settlement price of the contract, which is the spot price of the commodity on the day of settlement, was Rs 709.20 against the last traded futures price of Rs 717. Around 185 MT of mentha oil was delivered. |
| The national exchanges have also been requested to ensure that brokers/ sub-brokers/ entities, which have been suspended/ debarred by the Securities Exchange Board of India, the Bombay Stock Exchange, National Stock Exchange from trading at the stock exchanges, do not participate in the commodity derivative markets. |
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