No need to ban futures trading: FMC

KOZHIKODE: Allaying fears that futures trading promoted volatility leading to weakening of market trends, the Forward Markets Commission on Saturday said though it had the powers to ban futures trading, such a situation will never arise in the country.

"Banning futures trading will be the last resort for FMC (coming under the Union Ministry of Consumer Affairs). Instead, we will go in for additional regulatory measures to curb undesirable manipulations taking place in on-line trading," FMC Director Shivanand S Ajur told reporters here.

Noting that futures trading was not a mechanism to curb volatility but provide tools for price discovery for all those involved in the trade, he said market prices were influenced by various factors including global trends.

Refusing to buy reports that futures trading in rubber and pepper led to weakening of markets in Kerala as claimed by the Malabar Produce Merchants Association, a leading traders body, Ajur said FMC and the National Multi-Commodity Exchange of India were arranging a series of programmes to create awareness.

Following Kanpur, Indore, Hyderabad and Nizamabad, FMC and NMCE had held two such programmes in the state at Mannarkkadu and Nilambur.

During the meets, detailed discussions were held with growers, traders, processors and other stakeholders on the regulatory role of the FMC and NMCE to provide best trading practices to the members and clients, he said.