International BusinessFMC objects to ICEX's midnight trade move
Bourse says it can trade in tandem with Nymex.
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The Forward Markets Commission (FMC) has objected to the newly-approved Indian Commodity Exchange’s (ICEX’s) claim to be the only one to “enable trading beyond midnight”.
ICEX is promoted by Indiabulls Financial Services and MMTC, the state-owned commodity trading company. It got FMC’s nod to start futures trading in commodities early this month and plans to start trading by mid-November. It has made this claim in its pre-launch catalogue.
“I haven’t seen the catalogue. But they will have to take out this line if they have used it,” said Rajeev Agarwal, a member of FMC. It appears FMC has not approved the late hours, nor does it plan to extend trading hours in the near future. In fact, ICEX has not asked FMC for such permission. According to the Forward Contract (Regulation) Act, 1952, trade timings on all exchanges have to be same.
However, Ajit Mittal, managing director and CEO of ICEX, said he hadn’t felt the need for taking separate permission from FMC for synchronising trade with the New York Mercantile Exchange (Nymex), which was his plan.
“We are technologically sound and capable of handling trades in tandem with Nymex and other global exchanges,” he said. Synchronising trade with Nymex will extend the closing time by at least 30 minutes from the existing limit of 11.55 pm. Any trades executed beyond midnight would be considered the same as T+2 or T+3 for delivery and hence an extension of timing would make no major impact in absolute terms, Mittal said.
Meanwhile, the exchange is preparing to present contract specifications of at least 10 commodities for FMC’s approval.
ICEX says it will be the only exchange to have multiple delivery centres for bullion and that technology partner Millennium will unveil the world’s fastest trading platform. ICEX also claims to be the only exchange to start delivery in base metals. The exchange will soon apply for trading in all those commodities that have generated huge volume on other platforms.