Date:06/12/2006 URL: http://www.thehindubusinessline.com/2006/12/06/stories/2006120600391400.htm

Back Prevent suspended members from proxy trading; says FMC

Suresh P. Iyengar

Mumbai , Dec. 5

The commodity markets regulator, Forward Markets Commission (FMC), has told commodity exchanges to prevent the four suspended members from proxy trading by utilising the platform of others.

"Exchanges have been asked to be tough on defaulters. Now, it is for them to make sure that the suspended members do not make any back door entry into the markets. In case of future violations, the exchanges need not move FMC as we have already fixed the penalty to be imposed on the members," said Mr Rajeev Agarwal, member, FMC.

The regulator has also told exchanges to keep a tab on the open interest limits on a real time basis rather than monitoring end-of-day positions.

"We are constantly monitoring the market for any violations and tightening the regulations to plug loopholes. Frequent breach of norms will derail the entire trading system," said Mr Agarwal.

CIRCULAR TRADING

Apart from open interest limits and margins, the exchanges have been told to watch out for circular trading, particularly in illiquid contracts and speculation to push up prices.