Commodity Market Regulator FMC has given permanent approval to four national exchanges – MCX, NCDEX, NMCE and ACE – for commercial launch trade in particular set of futures contracts, instead of providing the permission of a base year.
This relaxation has been given to four national exchanges under certain conditions and depending on the volume and level of participation of traders in a particular contract.
In a recent order of the Forward Market Commission (FMC) said this action has been taken to ensure the functioning of the futures market for commodities efficiently to management and stakeholders, as hedgers and price risk farmers are capable of detecting the future price of commodities.
FMC has given permission for them continuous trading in futures contracts of 21 commodities in MCX, 22 commodities in NCDEX and 12 commodities in NMCE and in ACE 12 commodities.
Approval for continuous trading has occurred to the condition of the contract and contract release schedule and allowed by the FMC.
Exchanges are required to inform the regulator if they decide not to launch a new contract, even after receiving the approval of a continuous trading.
“With respect to contracts approved for continuous trading, the exchange deciding that trading of the contract should be suspended, the relaunching of trading of the contract must be with the prior approval of the commission,” said FMC.
FMC said the commission added that continued approval may be granted in other contracts, after reviewing their performance.
Reported News Source: PTI Economic Times