| The spat between the Forward Markets Commission (FMC) and the National Commodity & Derivatives Exchange (NCDEX) intensified on Monday when the regulator took a tough stand on the exchange's sudden decision on Thursday to change the settlement price norm for the January contracts in urad and chana. The NCDEX, on its part, denied any violation of the regulatory framework. |
| The FMC had forced the NCDEX to reverse the decision with immediate effect, and sources in the regulator's office said "a stiff penalty" might be imposed if the NCDEX was found guilty. |
| The regulator will meet exchange oficials tomorrow to take stock of the situation. A section of traders alleged that some of them lost heavily on account of the sudden decision taken. |
| Last Thursday at 4.16 pm, the NCDEX had displayed on its website the change in the contract term saying, "Members are informed that the final settlement price of urad and chana January contracts will be determined on the basis of the average of polled prices of the last five days, including expiry day." |
| This is against the normal practice, which takes the final spot price on the expiry day as the settlement price. The exchange withdrew the decision the same day around midnight following a direction by the FMC. |
| NCDEX sources claimed the decision was based on its regulations that stated that the determination of the settlement price lay with the exchange. |
| "The exchange can, hence, intervene to protect the market integrity as the first tier of regulation," the sources added. |
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