The commodity futures market is preparing itself for the next phase of growth, which will see greater participation of hedgers, corporate entities, exporters, processors and producers, said BC Khatua, chairman, Forward Markets Commission (FMC). In order to ensure this, he said there was need for more stringent and responsive regulation that would increase the confidence of market participants, maintain financial and market integrity, and discourage malpractices.
Mr Khatua was addressing a meeting of the members of the various exchanges belonging to the west zone-MCX, NCDEX and Ahmedabad-based NMCE-in Mumbai on August 31. The FMC has been holding meetings with the members of commodity exchanges on a regular basis to discuss various market related issues and to understand the impact of regulatory measures. In the last financial year, four such meetings were held, one in each of the four zones.
In his address, Mr Khatua underlined the recent regulatory and developmental measures taken by the FMC While outlining the future plans of the FMC, he said that the proposed amendments to the Forward Contracts and Regulation Act, 1952, would strengthen the hands of the FMC. He emphasised that because of the exponential growth and advent of sophisticated technology, the task of regulation had become very
challenging. He also pointed out the need for strengthening the corporate governance structure of the intermediaries to generate market confidence. The exchanges and their members should not only strengthen their capital base but also put in place a comprehensive and transparent governance structure.
During the technical sessions held on the occasion, several issues, such as changes in contract specifications, issues in delivery and penalty for failure in delivery, position limits and linking of the same to capital adequacy, capital adequacy of members, differential margining, discussion forum for developments in trade, etc., were taken up. The FMC and the National Exchanges responded to general issues raised by the participants and agreed to look into specific suggestions.
Friday's meeting was the first meet 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.
Mr Khatua was addressing a meeting of the members of the various exchanges belonging to the west zone-MCX, NCDEX and Ahmedabad-based NMCE-in Mumbai on August 31. The FMC has been holding meetings with the members of commodity exchanges on a regular basis to discuss various market related issues and to understand the impact of regulatory measures. In the last financial year, four such meetings were held, one in each of the four zones.
In his address, Mr Khatua underlined the recent regulatory and developmental measures taken by the FMC While outlining the future plans of the FMC, he said that the proposed amendments to the Forward Contracts and Regulation Act, 1952, would strengthen the hands of the FMC. He emphasised that because of the exponential growth and advent of sophisticated technology, the task of regulation had become very
challenging. He also pointed out the need for strengthening the corporate governance structure of the intermediaries to generate market confidence. The exchanges and their members should not only strengthen their capital base but also put in place a comprehensive and transparent governance structure.
During the technical sessions held on the occasion, several issues, such as changes in contract specifications, issues in delivery and penalty for failure in delivery, position limits and linking of the same to capital adequacy, capital adequacy of members, differential margining, discussion forum for developments in trade, etc., were taken up. The FMC and the National Exchanges responded to general issues raised by the participants and agreed to look into specific suggestions.
Friday's meeting was the first meet 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.
