The Hindu Business Line : Confusion over stock limit order applicability

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Confusion over stock limit order applicability

Gargi Shah

Mumbai , Sept 15

The stock limit order of the Maharashtra Government has jolted futures trade in pulses and wheat. There is also confusion over the applicability of the stock order on warehoused stocks at the accredited warehouses of the commodity exchanges.

The Department concerned is looking into the technical issues relating to the applicability of the stock limit order to stocks deposited by traders with commodity exchanges, a State Government official, who did not want to be identified, told Business Line.

However, contrary to popular belief that the Maharashtra Government stock limit imposition order was not applicable to the stock deliveries in the futures trade, a senior official of the Forwards Market Commission (FMC) clarified that it was "not true."

There is also apprehension relating to the applicability of the stock ceiling on imported wheat and pulses. These commodities are usually imported in large quantities running into thousands of tonnes.

Speaking at a conference today, the FMC Chairman stated that there has never been any discussion at any forum on banning futures trade in any class of commodities.

He added that there is also no plan to ban futures trade in any commodities.

But at the same time the markets could not be allowed to be dictated by a few participants.

On the Forward Contract Regulation Act amendment Bill, the Chairman said the Bill should not be construed as a step to further liberalise the markets.

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