NCDEX, MCX spat reaches apex court

MUMBAI: The spat between National Commodity & Derivatives Exchange (NCDEX) and commodity markets regulator Forward Markets Commission (FMC) has intensified. Two commodity market persons told ET that the exchange has filed a petition in the Supreme Court after the Bombay High Court disposed of its petition against the regulator on the issue of transaction charges at the admission stage itself.

When contacted R Ramaseshan, NCDEX���s chief executive and MD, declined to comment. FMC chairman BC Khatua said: ���I are not aware of NCDEX having filed a petition in the SC. Since we have filed a caveat in the SC, a notice will have to be sent to us by the bench hearing the case before it is admitted for hearing.���

One of the two persons, who claims to be privy to the development, said the SC will now order issue of notice to the regulator.

The HC on February 5 struck down NCDEX���s contention that challenged FMC���s right to issue a directive staying its circular to drastically bring down transaction charges to step up dwindling volumes and increase participation.

The court directed NCDEX to revert to FMC and gave it a fortnight to justify (to the regulator) how a reduction in transaction charges would lead to its own and the broader market���s benefit.

On February 19, however, FMC passed an order that quashed NCDEX���s circular on grounds that the bourse was unable to furnish a satisfactory explanation justifying how a drastic reduction in transaction fees would not jeopardise its own and the market���s interests within the time limit set by the HC.

NCDEX said it had not violated any of the regulator���s existing guidelines as there was no directive that exchanges should seek approval of or give prior intimation to FMC while prescribing a reduction in transaction rates.