FMC eases position limits for farm goods

NEW DELHI: Forward Markets Commission have liberalised open position limits, a restriction imposed on the quantity of commodities traded, and have also introduced an early delivery mechanism to boost agriculture commodity trade on bourses.

���We have revised open position limits for ���near month��� period to increase liquidity and also taken measures to improve delivery of commodities on exchanges,��� FMC chairman BC Khatua said here on Tuesday.

The turnover from agricultural commodities in three national exchanges and 19 regional exchanges has declined by 35% to Rs 585,433 crore in 2008-09 till March 15, and that compared with Rs 894,563 crore in the year-ago period

The regulator, which has taken decision in this regard in January, said that the position limits for ���near month��� are now applicable for minimum seven days before the expiry of the contract, while earlier it was fixed for 30 days.

The open position limits for ���near month��� period is a restriction imposed on the quantity of commodities that a trader (both clients and members) can trade a month before the expiry date.

���The earlier ���near month��� limit for 30 days before the expiry date restricted traders to trade in higher quantity and as a result volumes started falling on the exchanges. The revised norm will help trader maximise trade quantity before the specified time limit,��� FMC member Rajeev Aggarwal said.