NMCE Members Draw Flak From Exchange in India

The National Multi-Commodity Exchange (NMCE) has come down heavily on the members involved in fraudulent trade practices at the exchange. The exchange has recently issued a circular asking its members to stop indulging in such practices while the move has taken a toll of the turnover at the India's pioneering commodity bourse with a loss of over 80 per cent in past eight trading sessions.
"We have found several members from across the country violating trading rules at the exchange. There are many types of violations by our members. Hence, we had issued a circular to all of them to stop taking up such practices. This has reflected into the fall in the exchange volumes," said Anil Mishra, managing director, NMCE. According to the exchange data, the total volume at NMCE had fallen to 7,772 lots on Saturday (Feb 26) from 67,534 lots reported on Monday (Feb 28), showing a drop of around 88.5 per cent.
The daily turnover at NMCE has suffered a steep loss of over 80 per cent from Rs 20.91 billion on Monday, February 21 to Rs 3.99 billion on Tuesday March 1, 2011 after hitting a bottom of Rs 1.72 billion on Saturday, February 26, 2011.
The market participants have also raised concerns about the severe fall in the trading volumes at the exchange. Meanwhile, the apex market regulator, Forward Markets Commission (FMC) has been constantly noticing the daily movement at the exchange. But so far has not come across with any issues faced by the Ahmedabad-based commodity bourse. "We see the figures regularly. But they have not approached us for any issues so far," said BC Khatua, chairman, FMC.
The trading volumes at the bourse may take some more time to pick up pace. "We have to see how the traders now respond to our circular. We can not predict about the recovery in trading volumes at the exchange," Mishra said.
On Monday (Feb 28), the exchange traded in 20 commodities with NMCE Rubber futures having a volume of 12,168 lots with a turnover of about Rs 3.02 billion. The traded commodities on the exchange continued shrinking during the past one week. On Saturday (Feb 26), the number of commodities traded slipped to six commodities including rubber, copper, silver, guarseed, menthol crystal and gold guinea.
Some of the industry insiders have raised doubts about the management and the transparency of the operations at the exchange. However, on Monday (Feb 28), NMCE witnessed some recovery in the trading volumes.
Five commodities were traded with a total volume of 17,884 lots having a turnover of Rs 3.99 billion.
On Tuesday, March 1, the bourse traded in four commodities, with a the total trading volume of 16,262 lots amounting to a turnover of Rs 3.77 billion, the exchange data showed.
(Business Standard, India, March 3, 2011)