FMC mulls raising trading limits

Highlights need for stringent norms.

Commodity markets regulator Forward Markets Commission (FMC) is considering higher trading limits for hedgers as well as members of the exchanges with good track record.

"This is one of the many issues that have been fortified by the participants in the meeting today. That does not mean we are going to implement that. Some deliberations are needed to reach any conclusion," said Rajeev Agarwal, member, FMC.

He, however, clarified that the regulator is open to all suggestions. The FMC, along with the national commodities exchanges, convened a meeting of members of the west zone in Mumbai on Friday where hedgers demanded a host of issues including change in contract specifications of some agri commodities, delivery norms to name a few.

The meeting, which was chaired by FMC Chairman B C Khatua, was attended by 30 members of various commodity exchanges in addition to FMC officials Dr Kewal Ram, Rajeev Agarwal and other senior officers.

Agarwal admitted that it was difficult to distinguish the creamy layer in the trading community, but assured that the commission would do everything to make trading more transparent and functional.

In the inaugural address, the chairman highlighted the need for a more stringent and responsive regulation and emphasised the need to maintain financial and market integrity and discourage malpractices in the market.

While outlining the future plans of the Commission, Khatua said the proposed amendments to the Forward Contracts and Regulation Act, 1952, would let the Commission effectively regulate the market, which has become very challenging with the advent of sophisticated technology and the potential for exponential growth.

The meeting is the first in a series of four meetings proposed to be convened by the FMC in the current financial year for discussing various trade and market related issues with members in different parts of the country.

FMC also proposes to hold meetings with various other stakeholders of the industry.