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Our Bureau

New Delhi , Dec. 7

With a view to providing adequate deterrent provisions to curb speculative manipulation of prices of commodities, the Assocham has urged the Government to amend the Forward Contracts (Regulation) Act, 1952.

An Assocham paper on `Regulatory reforms required in Indian commodity futures market' says, "even though price fluctuations are part of a market economy, allowing speculation without price risk management will make the market a casino with an overwhelming majority of speculators.

"Futures markets are basically designed towards price discovery and hedging requirements of the actual users of the commodities."

What needs to be done is deploying measures such as special margins on purchases in a rising market and special margins on sales in a falling market, according to the chamber.

Also to be considered are limits on price fluctuations, restricting outstanding positions taking into consideration available stocks and taking drastic penal action against offenders among others.

More Stories on : Industry Associations | Commodity Markets

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