Press Release from FMC – January 12, 2006

The Forward Markets Commission issued Guidelines to the Regional Commodity Exchanges for obtaining membership of National Commodity Exchanges. The same is send as an attachment for your information.

I. GUIDELINES FOR REGIONAL COMMODITY EXCHANGES FOR OBTAINING MEMBERSHIP OF NATIONAL COMMODITY EXCHANGES

1 Any regional exchange wishing to take a membership of National Exchange should promote or float a ‘subsidiary company’ to acquire membership rights of other national commodity exchanges. The Exchange has to make necessary amendments to their By-laws.

2 The subsidiary company shall be 100 percent owned by the respective regional commodity exchange. The name of the subsidiary company shall not contain the words “commodity exchange.”

3 The Members of the parent commodity exchange shall register themselves as a constituent to be known as sub-brokers of its subsidiary company, to enable them to trade on commodities that are available on the national Exchanges where the subsidiary company obtains membership.

4 The subsidiary company shall not undertake any dealing in commodities on its own account i.e. proprietary trading not allowed.

5 The subsidiary company shall register only the members of the commodity exchange, which is promoting the subsidiary company as its sub-broker and no other client/sub-broker shall be entertained by the subsidiary company.

6 The constituent (i.e. sub-brokers) of the subsidiary company shall maintain separate deposit with the subsidiary company. The Capital deposited by the constituent (i.e. sub-broker) with the promoting commodity exchange as a Member shall not be transferred to the subsidiary company. This deposit to be maintained with the subsidiary company shall be in the form of cash only.

7 The trading exposure limit of the constituent (i.e. sub-brokers) shall be based on the deposit received by the subsidiary company from the sub-brokers. These exposure limits shall not exceed the limits as prescribed by the national Commodity exchange of which the subsidiary company is a member.

8 The subsidiary company shall collect margins from the sub-brokers for the payment of margins to the respective Commodity exchange of which the subsidiary company is a member. The margin imposed by the subsidiary company on its constituent (i.e. sub-brokers) shall not be less than the margin payable to the Commodity exchanges of which the subsidiary company is the member.

9 The commodity exchange shall incorporate the above mentioned conditions in the Memorandum of Association/Articles of Associations of the subsidiary company.

10 The subsidiary company shall appoint a Chief Executive Officer (CEO) who shall not hold any position concurrently in Commodity exchange (parent exchange). The appointment, the terms and condition of service, the renewal of appointment and the termination of service of CEO shall be subject to prior approval of FMC.

11 The Governing Board of a subsidiary company shall have the following composition:-

a) The CEO of subsidiary company shall be a director on the board of subsidiary. The CEO shall not be a sub- Broker of the subsidiary company or the broker of parent exchange.

b) At least 50% of Directors representing on the governing Board of subsidiary company shall not be sub-broker of the subsidiary company or broker of promoter / holding exchange (parent exchange). This director (excluding CEO) shall be called Public Representative.

c) The Public Representative shall be nominated by the parent exchange subject to prior approval of FMC.

d) Public Representative to be nominated as director of subsidiary company shall be from amongst the person of integrity having necessary professional competence and experience in the areas related to commodities market.

e) For the purpose of nomination as Public Representative, the Governing body of parent exchange may forward the names of the parson to the FMC for its approval. The FMC shall, however have the right to nominate person, whose name have not been forwarded by the Governing body of the Commodity exchange.

f) The Public Representative to be appoint as directors shall hold the office for the period of one year from the date of assumption of the office or till the Annual General Meeting of subsidiary company whichever to earlier.

g) There should be a gap of at least one year after a consecutive period of three years before re-nomination of any person for the post of non-member director.

h) The parent exchange may appoint a maximum of two directors who are officer of the parent exchange. Such directors shall be in addition to 50% non Member directors (public representative) mentioned above.

12 The subsidiary company shall have its own staff none of whom shall be concurrently working for or holding any position of office in the parent exchange

13 The parent exchange shall be responsible for all risk management systems of the subsidiary company and shall set up appropriate mechanism for the supervision of the trading activity of subsidiary company. Such mechanism shall include:-

a) Verification of compliances if margin payment and other risk management measures applicable to a subsidiary company as a broker member of the exchange.

b) Reporting requirement between the subsidiary and exchange, such as placing quarterly report on the financial accounts of subsidiary and review of operations of the subsidiary before the Governing Board of exchange at its meetings.

c) Conducting half-yearly inspection of the subsidiary and 20% of its sub-brokers and placing such reports before the Governing Board of the exchange.

d) Handling of complaints of constituent (i.e. sub-brokers) of the subsidiary company.

II. Also, the List of Holidays Prescribed to National Commodity Exchanges is given below

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Forward Markets Commission

Dated January12, 2006