Ahmedabad, Mar 7 (UNI) The Forward Markets Commission (FMC) has advised the representatives of Automotive Tyre Manufacturers' Association (ATMA) and rubber dealers to encourage larger participation in the rubber futures market with a view to make the process of price discovery more efficient and lower the risk of price volatility, a National Multi-Commodity Exchange (NMCE) release said here today.
It has been confirmed that ATMA has been advised to encourage larger participation in the futures exchanges in the wake of speculations about the outcome of the discussion which ATMA had with FMC, as reported by various members, The commission has also advised the representatives of ATMA and the rubber dealers to use the stocks of rubber available with them to create credibility through compulsory delivery of the commodity to prevent any possible manipulation of prices by the persons working in consort, if any.
The facility of compulsory delivery of the commodity is provided by NMCE in its rubber futures contracts in the most transparent manner through negotiable and transferable Warehouse Receipts of the Central Warehousing Corporation (CWC), the release said.
The NMCE's aim is to increase wider active participation particularly of commercial participants. In this context, it is clarified that the commercial participants and consumers of rubber, including tyre manufacturers, can use the market both for covering their price risk (hedging) against their inventories as sellers, and for covering their regular purchases through futures markets as buyers.
There is no bar on bulk consumers like tyre manufacturers on taking speculative positions within the limits on Open Positions as prescribed by the Commission. Rubber is one the most actively traded commodities at NMCE, which also provides electronic platform for futures trading in about 190 series in 70 commodities, including bullion, spices, oilseeds, edible oils, non-edible oils, sugar, gur, pulses and other food grains, the release added.
UNI
It has been confirmed that ATMA has been advised to encourage larger participation in the futures exchanges in the wake of speculations about the outcome of the discussion which ATMA had with FMC, as reported by various members, The commission has also advised the representatives of ATMA and the rubber dealers to use the stocks of rubber available with them to create credibility through compulsory delivery of the commodity to prevent any possible manipulation of prices by the persons working in consort, if any.
The facility of compulsory delivery of the commodity is provided by NMCE in its rubber futures contracts in the most transparent manner through negotiable and transferable Warehouse Receipts of the Central Warehousing Corporation (CWC), the release said.
The NMCE's aim is to increase wider active participation particularly of commercial participants. In this context, it is clarified that the commercial participants and consumers of rubber, including tyre manufacturers, can use the market both for covering their price risk (hedging) against their inventories as sellers, and for covering their regular purchases through futures markets as buyers.
There is no bar on bulk consumers like tyre manufacturers on taking speculative positions within the limits on Open Positions as prescribed by the Commission. Rubber is one the most actively traded commodities at NMCE, which also provides electronic platform for futures trading in about 190 series in 70 commodities, including bullion, spices, oilseeds, edible oils, non-edible oils, sugar, gur, pulses and other food grains, the release added.
UNI
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