ACE has also gone back on the resolutions made earlier. The move is likely to start a cold war between the premier commodity bourse and the watch dog, if current state of affairs continue.

``The governing board has decided in principle to reintroduce by-weekly clearing as daily clearing was not in the interest of the trading community. The board was to scheduled to meet on Saturday (April 24) to consider the removal of the recently introduced slip system, said the president of ACE, Jayesh Shah. The meeting will, however, be held sometime this week.

The resolutions have created uncertainty on the September contracts because FMC stipulations say daily clearing is a pre-condition for any futures. The move is believed to be a direct response of FMC's reminder to arrange fresh elections at ACE, said an insider.

Itis worth noting that FMC has recently issued a directive to disseminate the existing board, and hold fresh election in the wake of the complaints it had received from some members regarding violations of bye laws. The directive has caused ripples among the trading circles with most traders qestioning the need for such a move.

The ACE board officials claim that their decision was taken after seeking legal opinion. According to legal experts FMC has no right to intervene in the internal matters of the bourses as its main role is supervision.Confirming the stance, Shah said: We have informed the FMC about our decisions. We hope we will get September futures without daily clearing and FMC realises our needs.

According to an insider FMC may not grant the September futures as it may set a wrong precedent among futures exchanges. FMC may not take it for granted, as it wants to introduce more reforms like on-line trading, ware house receipts in the domestic futures exchanges. It will not grant the permission ofSeptember futures without earlier terms, said a trader. If ACE can get the nod for futures without daily clearing, other bourses may follow suit, said an observer.

``We are not bothered about September contract. If we won't get the permission, we are ready to shut the exchange,'' said an an ACE director.On the September contract, Shah said ACE would get the futures in due course, however he had not ruled out the possibility of delay.

The domestic futures markets are still unable to adopt reforms, though they are necessary their implementation should be in phases, Shah added.Daily clearing has encouraged volume-based speculation, discouraging actual price levels and market efficiency. It provides unfair advantage to big players. With the derivatives like `Jota' and `Fatak' they can disturb the entire trade.

Weekly clearing will provide some respite to small traders who speculate on the fundamentals rather than sheer volumes, said a leading analyst.

According to traders, FMC is just imitating westerntrading practices, which can't serve the purpose of transparency and efficiency unless the broad macro changes are made. The other such issue is much talked On line trading. A public debate should be made before it's implementation, said an official of the exchange. Even leading global Bourse like Commodity Exchange New York and London Metal exchange also have continued time tested open outcry system along with on line trading. As the Indian commodity futures traders are still not familiar with computers, on line trading will not be a useful proposition, they added.