In yet another blow to NCDEX, capital and commodity market regulator SEBI has directed the exchange to suspend trading in chana contract and not launch any new chana contracts till further orders.

All the open positions in chana have to be squared off, said the regulator.

NCDEX recorded a turnover of ₹216 crore on Thursday and the open interest was 19,146 lots. 

“As directed by SEBI, no new chana contracts shall be launched till further orders. In respect of running contracts in chana, no new positions will be allowed to be taken; only squaring up a position will be allowed,” said the exchange in a statement late on Thursday.

Most of the speculators will incur a huge loss as the contract is being suspended abruptly. Such frequent action on agriculture commodity futures would destabilise investor’s confidence and adversely affect trading volumes in agriculture futures trading.

The sharp rise in chana futures  prices on the pretext of delayed monsoon has caught the attention of both the Centre and SEBI, leading to suspension of the contract.

In April, the exchange imposed an additional special cash margin of 25 per cent on the buy side and 5 per cent on the sell side to curb speculators activity.

The chana contract was attracting good volumes even though investors have to put in 45 per cent of the trade value upfront as margin on the buy side and 10 per cent on the sell side.

The directive comes at a time when NCDEX is trying to rebuild investors’ confidence post the castor seed fiasco. 

Early this year, the exchange suspend trading in castor seed, which was generating the highest volume, due to massive speculation, and took punitive action by suspending a few trading members.

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