The markets regulator Securities and Exchange Board in India (SEBI) has directed the commodity exchanges to suspend trading of futures contracts of seven agri-commodities until further orders.
SEBI has banned futures and options trading in host of agriculture commodities including chana, mustardseed, soya bean and its derivatives, crude palm oil, moong, paddy (Basmati) and wheat for a period of one year. The ban would come into effect from Monday, said SEBI.
NCDEX in a statement said no fresh positions (including intra-day) will be allowed in respect of Futures and Options contracts of Wheat, Chana, Rapeseed – Mustard Seed, Soybean, Refined Soy Oil, Soybean Meal, Crude Palm Oil, moong and NCDEX Soydex listed on the Exchange with effect Monday.
Only squaring up of existing positions will be allowed and no new Futures and Options contracts will be launched till further notice in any of these commodities, it added. The drastic move comes on the back of concern over rising inflation and would unsettle the entire commodity derivatives eco-system including that of broking firms which will be literally left only with only metal and energy contracts to trade and promote.
Interestingly, SEBI decision comes days after it mooted consultation paper to allow foreign entities to trade in commodity derivatives and promote ‘one exchange one commodity’concept. “No new contract shall be launched till further orders. In respect of running contracts, no new position will be allowed to be taken. Only squaring up of position will be allowed. These directions will be implemented with immediate effect. The above-mentioned directions are applicable, for a period of one year,” read SEBI’s notification.