Saturday trade under review

MUMBAI: Commodity market regulator Forward Markets Commission (FMC) has asked commodity futures exchanges to come to a consensus on whether to continue trading on Saturday or not. Exchanges operate between 10 am and 2 pm on Saturdays and record very thin volumes.

Both the Multi Commodity Exchange (MCX) and the National Commodities and Derivatives Exchange (NCDEX) are contemplating whether to discontinue commodity futures trading on Saturdays. "Certain members feel as international markets are closed, there should be no trading on Saturdays. However, there is no consensus on the issue," said an MCX official.

"The main concern is investor protection. We are seeking views on these issues, and are keeping an open mind. No decision will be taken without consideration," FMC member Rajeev Agarwal told ET. FMC chairman BC Khatua is travelling and was not available for comment.

Meanwhile, the regulator has also sought views from exchanges on portfolio management services (PMS) and market making methods. The exchanges have been asked to submit a working paper by the next month indicating the suggested modus operandi and the possible issues involved. FMC had issued a circular late last year banning fund-based PMS in commodities.

FMC also discussed easing broker limits with exchanges in a meeting last week to broaden the base and ensure higher participation. An exchange member present at the meeting said, "There are limits at the client level too. So, if the limits on brokers are removed, it would increase the participation in commodity futures trading."

Other issues discussed by the participants included changes in contract specifications, issues in delivery and penalty for failure in delivery, capital adequacy of members, differential margining and discussion forum for developments in trade.