PRESS  NOTE

The issue of foreign commodity exchanges and their members to place dedicated computer terminals in India has been examined by the Forward Markets Commission with reference to the provisions of Section 15 and Section 18 read with Section 11 and Section 21 of The Forward Contracts (Regulation) Act, 1952.  It is clarified that forward contracts, other than those that are (a) entered into between members of a recognized association or through or with such members in goods that are notified under Section 15; (b) complying with the bye-laws of recognized exchanges and (c) not in violation of any contract specification, would be considered illegal and void. Therefore, real time trading in a commodity by opening the terminals of foreign commodity exchanges in India without prior approval of the Central Government or FMC, as the case may be, would be deemed as illegal and persons entering into such contract would be punishable under Section 21 of the FCR Act, 1952. 

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     Dated the 24^th  April, 2006

Forward Markets Commission

                                                    ‘Everest’, 3^rd Floor,

                                                    100, Marine Drive,

                                                           Mumbai-400 002