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“It has been decided that exchanges should ensure that email alerts are sent compulsorily to all the clients, who have furnished their email addresses to their respective members,” the FMC said in a circular sent to all exchanges today.
The circular also said the maximum penalty for every client code would be Rs 5,000 a day. The penalty would be made effective from April 1. The fund collected would be deposited in the account of investor protection fund (IPF) of the exchange.
In order to implement these directives, the regulator has directed to exchanges to amend the existing relevant laws to accommodate this new provision.
The regulator had earlier directed commodity exchanges not to execute orders of client without registering their email IDs and mobile numbers.
The broking community, however, is divided on the impact of this circular.
According to Priti Gupta, executive director of Anand Rathi Commodities, the FMC’s decision would drive away retail trade from commodity exchanges. This will also lower volumes and turnover of exchanges that have been witnessing a fall in business for several months due to various issues.
“With over 50,000 clients spread across every nook and corner of the country, it is very difficult to trace all of them in such a short period of time. Hence, the FMC should have given a time period of at least three to six months to register email IDs and mobile numbers of each and every client,” she said.
Naveen Mathur, associate director (commodities and currencies) of Angel Broking, however, feels FMC’s provision would strengthen trading through greater transparency levels.
“What is wrong in giving your email ID and mobile number for alerts? Ultimately, clients are getting alerts of trade confirmation. Hence, no clients, in my view, should have any problem in tendering all these information,” he said.
Through all such measures, traders’ confidence will go up, he added.
