Expelled member of one bourse stands expelled in all, says FMC

PTI Posted online: Monday, Jun 30, 2014 at 0000 hrs
New Delhi : In line with the practice followed by stock exchanges, commodity markets regulator Forward Markets Commission (FMC) has directed exchanges to expel members who have been expelled by any commodity exchange with immediate effect.

However, if a member is only suspended or debarred by a stock exchange, such member will not be suspended by any other commodity bourse, it said.

The norms on defaulted members have been modified following the representations from exchanges and members.

As per the modified norms, FMC said: "In case of expulsion of a member from one commodity exchange, such member would ipso facto stand expelled from all other commodity exchanges where he is a member."

The concerned exchange should intimate the other commodity bourse about the expulsion of such member and should also display the name of the expelled member on their website for public information, it said.

FMC further said that disciplinary action taken by a commodity exchange against a member in the form of reprimand, fines, warning and suspension, may be confined only to the commodity exchange which has taken such action.

However, the concerned commodity exchange should intimate to the other commodity exchanges about such action taken against any member, it added.

"In case of a member suspended/debarred by a stock exchange, such action will not lead to suspension of the member in any of the commodity exchanges since, members/ brokers trading on the commodity exchanges cannot be the same entity which is a member/broker of a stock exchange," it said in a circular.

Other norms relating to sharing of information among bourses about defaulter members would continue to remain the same, it added.

Currently, there are five national commodity bourses and 14 regional exchanges. Their combined turnover stood at Rs 11.66 lakh crore as on June 15 of the current fiscal, down by 66 per cent from the year-ago period.