The Hindu Business Line : NCDEX to impose fine on members violating norms

THE National Commodity & Derivatives Exchange (NCDEX) has decided to levy a fine on any member violating rules during inspections from May 16, to ensure better compliance.

The step to impose fines is based on the experience gathered on observing violations committed by members during inspections. "The amount will vary from Rs 5,000 to Rs 10,000 for single instance and Rs 25,000 to Rs 50,000 for following violations," an exchange official said.

A list of violations observed during the inspections were non-maintenance of books of account, non-maintenance of clients accounts, delay in delivery of commodities and payment of clients, non-maintenance of unique client code/non-maintenance of mapping of the trading codes to unique client codes, non-issue of contract notes and sharing of brokerage with another trading member or an employee of another trading member or a person for or with whom trading members are forbidden to do business.

With the growth in the volumes traded on the exchange and large number of transactions taking place as also their continued growth, the exchange has been conducting inspection of the books of accounts, other records and documents of the members so as to ensure compliance with the rules, regulations, bye-laws and circular instructions, according to a latest circular issued by the Exchange.

The Exchange has clarified that the actions, including fines, are only indicative and it may take action as it deems fit, including levy of higher fines/suspension/expulsion in case of a large number of instances of a serious violation involving large amounts or of repetitive nature.

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