The Hindu Business Line : HC reserves order on NCDEX plea

Mumbai, Feb. 2 The Bombay High Court reserved its verdict on the writ petition filed by National Commodity and Derivatives Exchange Ltd (NCDEX) against the commodity market regulator Forward Markets Commission (FMC) over slashing of transaction rates by the exchange.

Appearing for NCDEX before the division bench of Chief Justice Mr Swatanter Kumar and Mr Justice Dhananjay Chandrachud, Senior Advocate Mr Iqbal Chhagla said the bye-laws permit NCDEX to fix the transaction charges.

FMC counsel Mr Rafiq Dada said the reduction in rates might have big “financial implications”. Further, the decision was taken after giving a mere 24 hours’ notice to the FMC, he added.

The court reserved the order after hearing both sides.

Faced with a sharp drop in turnover since July, NCDEX last month created two sets of transaction fees for two trading sessions.

The exchange announced uniform charges of Rs 3 for every lakh of the total value of all trades in all commodities from 10 a.m. to 5 p.m. and five paise in the second session from 5 p.m. to 11 p.m.

The reduction in transaction was targeted to boost the trading volumes especially in metals which are largely traded after 5 p.m. to take advantage of the cues emanating from the international markets.

FMC took exception to this reduction, saying it might affect the business of two other commodity exchanges. The regulator also ordered NCDEX to keep the new structure in abeyance, forcing the latter to move the Bombay High Court.

Meanwhile, according to the FMC data, the turnover at the NCDEX declined 34 per cent to Rs 21,484.15 crore in the fortnight ended January 1-15.

More Stories on : Courts/Legal Issues | Commodity Exchanges

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