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Our Bureau

Mumbai , Sept. 30

THE Forward Markets Commission (FMC) has said the penalty for default of deliveries by trading members would be hiked to five per cent from the existing 0.5 per cent of trade value.

The penalty would be imposed for non-delivery of both agriculture and non-agriculture commodities and it will come into effect from November 1, said the FMC Chairman, Mr S. Sundareshan.

Announcing another significant decision taken at the FMC meeting here today, he said performance-based audits would be conducted on all three multi-commodity exchanges, including Indore's National Board of Trade (NBOT), starting October-end.

The books of members of the exchanges or those trading on behalf of clients will be checked at random by outside auditors, he said. This was meant to check the performance of exchanges vis-a-vis the integrity of the markets, he said, adding that no criteria have been outlined. On price limit, the FMC chief said if the daily price limit was breached at the upper or lower limit, trading will be stopped for 15 minutes and resumed with an increased price band of 50 per cent of the existing price band.

Accreditation: The regulatory system is also moving towards uniform margins and daily limits on the three multi-commodity exchanges, he said. He also said members should have accreditation with FMC by the year-end, after which they will be given Unique Membership Code. Those without the code will not be allowed to trade in any exchange, he said.

Meanwhile, the volume of trade has already exceeded last year's figures in the first five-and-a-half months, he said.

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FMC increases fine on delivery defaults; moots performance audit

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