The Forward Markets Commission, the apex commodity futures regulator in India, plans to collaborate with commodity organizations in other countries to strengthen its regulatory arm.
FMC member Rajeev Agarwal told reporters in Kochi that collaborations with foreign regulators are to ensure that commodity futures trading is on par with other countries in the world.
Already, he said, FMC has taken membership of IOSCO, a body of all international security and commodity market regulators and signed MOUs with USCFTC and CSRC, commodity futures market regulators of US and China respectively.
"The commission has taken various steps in the past one year to regulate the market so that every stakeholder benefit by hedging themselves against price fluctuations," Agarwal said.
These steps include stringent penalties on exceeding the prescribed open interest positions, restrictions on proprietary trading, making PAN mandatory, real-time monitoring of open positions, prohibiting portfolio management services by members to their clients, registration of intermediaries such as warehouses and audit of exchanges and their members through professional auditors.
The FMC members said that major problem faced by the futures market is the lack of awareness.
Thus, to increase awareness among farmers, FMC is planning to include commodity futures market in the curriculum of educational institutions.
FMC and the national exchanges are planning to install real-time display at APMCs to disseminate the futures price of agricultural commodities, Agarwal said.
He said the feasibility of dissemination through other channels such as post offices, rural banks, and cooperative institutions is also being examined.
The commodity futures market in India has grown considerably in the last two years and the total value of trade in 2006-07 was Rs 36.76 lakh crore, up 70% compared to the previous year, the FMC member added.
