Comexes tighten noose around errant traders; penalty for non-genuine deals

'The regulator's decision will certainly act as a deterrent towards such malpractices and safeguard the interests of genuine investors'

Tightening the noose on errant traders, commodity exchanges (comexes) have levied a 100 per cent penalty on members facilitating non-genuine trades.

While comexes had already issued guidelines to identify non-genuine or errant traders, a circular issued by both national platform— Multi Commodity Exchange of India (MCX) and National Commodity and Derivatives Exchange (NCDEX)—dated August 20 made members responsible for such trades. Earlier, comexes used to issue only warnings to the concerned members. 

“Non-genuine trades are executed by market participants primarily with the objective of transferring profit/loss between the concerned entities. In view of this, penalty up to 100% of the profit made/