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The Forward Markets Commission (FMC) has said it would share reports of irregularities in the futures market with the Competition Commission of India (CCI) and agencies such as tax authorities. The move is aimed at deterring those violating commodity futures market norms. While most agencies share information, as violations typically lead to tax evasions, etc, such a deterrent is crucial for FMC, as it is awaiting more powers to punish wrongdoers.
In futures trading, several irregularities have come to light. Sharing information on these may be useful for investigating agencies in tackling violations in their respective areas of operations. “We will not hesitate to share the findings with other agencies,” said FMC Chairman Ramesh Abhishek.
While investigating futures trade in guar seed and gum last year, FMC had come across instances of price rigging, as well as other irregularities. The commission is still issuing notices in this regard. In March 2012, guar gum prices rose to Rs 1,00,000 a quintal; for this, several traders had blamed the futures market. In 2011-12, exports of guar gum stood at Rs 16,000 crore.
Last month, CCI had launched an investigation into alleged cartelisation by guar companies, and had sought inputs from FMC.
FMC had found some companies were financing others to take positions on their behalf in the futures market. Now, when trade in guar seed/gum futures has been permitted again, FMC has, in a circular, said members of the exchanges would have to ensure their clients disclosed their source of funds if the exchanges needed the information for any investigation.
