SEBI to crack the whip on illiquid commodities

After the merger of Forward Markets Commission, SEBI for the first time may come hard on the illiquid commodities and contracts. According to some media houses, the market regulator is planning to suspend the trading in the commodities which are illiquid. SEBI is focussing on improving the risk management of commodity exchanges. On the other hand, it has also been trying to introduce new products and allow new participants in commodity derivatives.

The decision in this regard is expected to come soon as the trading data of September on the MCX is timid. According to trading data for September, out of 29 commodities on the Multi Commodity Exchange of India (MCX), 10 are generating zero volumes.  Four commodities are contributing between 0.5 per cent and one per cent of volumes. Some of these commodities are mini contracts or different varieties of some highly traded commodities. In September, MCX’s average daily trading volume was Rs 23,756 crore.