Mumbai: Commodities markets regulator Forward Markets Commission (FMC) on Monday said commodity future exchanges are responsible for ensuring the settlement of outstanding forward contracts by way of delivery.
Forward Contract Regulation Act, 1952, requires all forward contracts to be delivery-based.
Without mentioning any exchange, FMC said “it has been observed that some of the exchanges have issued circulars to their trading members and other market participants in which conscious efforts have been made to evade their prime responsibility of ensuring quality and quantity of commodities as per the prescribed contract specification, and to pass on the entire onus to the warehouse service providers, which is not correct”.
FMC also said the warehouse service providers should be sufficiently well-equipped to comply with its conditions as warehouses have a critical role in settlement and trade in commodities market.
It has directed the exchanges to ensure that all the existing FMC accredited warehouses get registered by 31 December.