The Forward Markets Commission (FMC) is seeking legal powers to include commodity brokers under the Prevention of Money-Laundering Act, 2002 (PMLA) so that the commission can use its powers to curb illegal trading (dabba trading) at the futures exchange-platforms and prevent money laundering.
The Prevention of Money Laundering Act is a legislation enacted to prevent money laundering and provide for confiscation of property derived from, or involved in, money laundering and for matters connected therewith or incidental thereto.
?We have gone through the Act and we are seeking legal empowerment from the government to act against commodity brokers involved in such activities. We have recently issued instructions to exchanges to prepare a structure of providing the necessary information of each broker to the FMC,? Kewel Ram, member, FMC, said, at the launch of futures trading in coriander on the National Commodity & Derivatives Exchange (NCDEX) platform.
?The NCDEX has launched the coriander futures contract which will cater to the requirements of value-chain participants. But the exchanges must ensure correct polling in the spot market which necessary for the success of the futures contract in that commodity. If proper polling is done, the contract can get more liquidity from hedgers and other stakeholders that in turn will make the contract successful,? said BC Khatua, chairman, FMC.
The Badami variety of coriander has been launched on the NCDEX as this grade is the most widely used in the country.
?Coriander futures is the latest addition to the existing basket of spices contracts that can be traded on our exchange,? R Ramseshan, managing director and CEO, NCDEX, said.
The contract is with compulsory delivery and the unit of trade is 10 metric tonne. The tick size is Re 1 and the delivery centres are at Kota and Jaipur in Rajasthan and Guna in Madhya Pradesh.