PRESS  NOTE

 

1.       In Mentha Oil a significant volatility has been observed in the spot and futures prices.  MCX, Mumbai after discussions with the Commission, imposed an additional margin as follows-

 

i)        Additional margin of 4% shall be levied on the members having open positions (both buy and sell sides), along with the daily initial margin of 8% and special margin, if any.

ii)       Additional margin of 5% shall be levied on the members having net long open position in all the contracts of Mentha Oil.  This will be calculated at the end of the trading day on the net open long position of the members (at client level), and will be blocked from the deposits available with the Exchange.  Such reduced deposits will be available to the members for trading for the next day. This additional margin will be in addition to the additional margin as mentioned in i) above.

This circular will be effective from outstanding open position at the end of trading of December 31, 2005, Saturday.

 

2.       FMC had been closely interacting with the Exchange particularly towards the close of the contract. The settlement price of the contract, which is the spot price of the commodity on the day of settlement was Rs.709.20 against the last traded futures price of Rs.717/- and around 185 MT of Mentha Oil was delivered.

 

3.       After examining the developments in the price movement, volatility, open position and volume of trading the Commission has issued the following directions for immediate implementation by the Multi Commodity Exchange, Mumbai and National Commodity and Derivative Exchange, Mumbai-

 

i)                  A penalty of 5% for failure of not taking / tendering delivery from January 2006 contracts shall be imposed.

ii)                Open position shall not be permitted to be increased during the last five days prior to the expiry of the contracts.

 

4.       These directions shall be applicable to all the running mentha oil contracts including the January 2006 delivery. 

 

5.       The National Exchanges have also been requested to ensure that brokers / sub-brokers / entities who have been suspended / debarred by Securities Exchange Board of India, Bombay Stock Exchange, Mumbai and National Stock Exchange, Mumbai from trading in Stock Exchanges do not participate in the Commodity Derivative Markets.

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