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FMC may not renew licence of ailing commodity exchanges

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Dilip Kumar Jha Mumbai
Commodity market regulator the Forward Markets Commission (FMC) may not renew licences of ailing commodity exchanges, once the existing licences expire.
 
In a strongly worded message, Anupam Mishra, director, said performance of an exchange would be the prime criterion for renewal of its licence.
 
There are more than half-a-dozen commodities exchanges, namely e-Commodities, E-sugarindia, the East India Cotton Association, the East India Jute & Hessian Exchange, among others, which have failed to attract trades on their respective platforms.
 
"A majority of these exchanges have been granted permission for a certain period. We will wait for that period to expire, and the promoters to approach us for renewal," Mishra added.
 
A number of other commodity exchanges including Bikaner Commodity Exchange, the Bombay Commodity Exchange, First Commodity Exchange and Chamber of Commerce managed to record very thin volume and turnover. These exchanges are also on the FMC's radar. Most of these exchanges such as Delhi-based e-Commodities were granted a five-year licence in March 2003, which is expiring in March 2008.
 
These exchanges neither launched trading in new commodities nor did they make efforts to upgrade their trading systems from open outcry to online. Most of these exchanges are facing financial crunches with the lack of adequate fund allocations. Therefore, neither members of these trading platforms nor authorities concerned paid any heed to uplift the ancestral method of trade.
 
"Some of these exchanges have more than 50 years of trading experience, but they failed to cope with the modern online trading system," said a local trader.
 
In fact, the FMC is clueless about the existence of e-Commodities as the exchange was put on sale about a year ago. The exchange, however, found no buyers. Three promoters "� P Rama Babu, MD, EID Parry (India), S L Jain and V K Gupta "� had reportedly evinced interest in buying the ailing exchange. However, Rama Babu said that there was no point in buying the company that's almost dying. Other interested buyers remained untraceable.

 
 

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First Published: Jun 01 2007 | 12:00 AM IST

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