FMC Chief Sees Thicker Crowd At Commodity Exchanges

KOLKATA: The commodity futures market is preparing for the next phase of growth that will see greater participation by hedgers, corporate entities, exporters, processors and producers, according to Forward Markets Commission chairman BC Khatua.

In an interactive meeting with national commodity exchanges and its members on Tuesday, Mr Khatua said various aggregation models, with or without financial support from banks, may be piloted by the exchanges to facilitate farmers’ participation in the futures market. In this regard, cooperative societies, banks and NGOs can act as aggregators of farmers.

As the commodity market regulator, FMC feels there is a need for more stringent and responsive regulation to ensure transparency and increase the confidence of participants. “The passage of the amendment Bill on Forward Contracts (Regulation) Act will go a long way in achieving this objective,” he said.

He also highlighted the importance of various confidence building measures, including strengthening the legal framework to respond quickly and adequately to regulatory challenges thrown by the market, strengthening the capital and corporate governance structure of the intermediaries and education of clients on risks and rewards involved in the online trading in the spot and futures markets.

Mr Khatua said full transparency in client dealings and prompt settlement of disputes enables sustainable growth in clientele and volume trading. Any shortcuts to maximise brokerage revenue will not only rob the members of their clients but put the credibility of the market itself in jeopardy. Mr Khatua said FMC is committed to adopting best practices to make the market client-friendly and remove all impediments to healthy growth of the futures market.

FMC has organised meetings with exchange members, hedgers, trade associations and farmers’ bodies. More meetings have been lined up over the next six months with various interest groups.