The five national commodity exchanges have transferred Rs 65 crore to the investor protection fund (IPF), as directed by the commodity markets regulator Forward Markets Commission (FMC). The amount was collected as penalty from investors in last six years. The FMC is in the process of setting up Trusts to operate the IPF, it said in a bulletin released recently.

In February, the FMC wrote to the exchanges saying that the penalties collected from investors cannot be a source of income and need to be transferred to IPF with immediate effect.

CLUBBING OPEN POSITION

“It was observed that there were still instances of parties acting in concert in order to circumvent open position limits,” said the FMC. Since it is not feasible to define all parameters and criteria for checking open interest, the national exchanges have been directed to take suitable measures for clubbing of open interest to include criteria such as PAN number and patterns such as “acting in concert” through common ownership.

Besides, the exchanges were told to use any other relevant pattern that may be observed during the course of regular monitoring and surveillance. The Commission observed that the incidence of circular trades and trades of non-genuine nature rises steeply during the months of February-March presumably for the purpose of evasion of taxes, particularly in illiquid contracts. The national exchanges were therefore directed in February 2012 to monitor strictly the occurrence of such trades, it said.

TURNOVER

The turnover on the 21 commodity exchanges during the March quarter was a tad lower, at Rs 44.03 lakh crore, than the Rs 44.62 lakh crore logged in the December quarter.

This was largely due to the fall in most commodity prices and curbs on the maximum limit an investor can buy, besides high margins imposed in select commodities.

When compared year-on-year, the March quarter turnover is up 20 per cent. Of the total turnover in March quarter, the five national exchanges accounted for Rs 43.87 lakh crore, while the remaining 16 exchanges contributed Rs 0.16 lakh crore.

With a turnover of Rs 21.54 lakh crore, bullion alone accounted for about 50 per cent of the total in the March quarter, while other metals chipped in with Rs 8.54 lakh crore.

Agriculture commodities and energy products amounted for Rs 7.24 lakh crore and Rs 6.80 lakh crore, respectively.

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