Press Release

A.  Imposition of Additional / Special margins in Chana and Wheat contracts and reduction in the limit on daily price fluctuation in Wheat Contract:

       After examining the trade pattern, Commission has decided to introduce the following changes in (i) margin rates in respect of all the contracts in Chana (Gram); and Wheat; and (ii) limit on daily price fluctuations in respect of Wheat contracts:

2.       Besides additional margin of 5% imposed by the Commission on the longs and shorts on dated 13.7.2006, Exchanges are directed that  they should impose a further additional margin of 10% on all long positions and 5% on all short positions in respect of all Chana contracts. Thus henceforth the revised additional margin rates will be 15% on longs and 10% on shorts.  These additional margins would be in addition to all other margins presently imposed by exchanges on their own.   The exchanges shall be free to charge higher margins than those indicated above.  This additional margin imposed by the Commission would also be collected in cash.

3.       Exchanges are directed that the special margins of 10% on long positions of all Wheat contracts imposed by the Commission on 28.6.2006 should be raised to 20%.  This shall be in addition to all other margins like initial, exposure etc. imposed by the exchanges on their own.  This margin of 20% payable by the longs would be collected in cash.

4.       These revised margins in respect of Wheat and Chana contracts would be applicable on the positions outstanding  with effect from the close of business hours on 31.8.2006.

5.       Commission has also decided to reduce the limit on daily price fluctuations to 4% as against 6% earlier in respect of all Wheat contracts.  Thus after the futures prices rise or fall by 4%, no fresh trading would be permitted beyond the limit of 4%.

6.       The revised limits on daily price fluctuations would become effective from the commencement of business hours on 1^st September, 2006.

7.       The Exchanges have been advised to widely disseminate to the members and the compliance of the orders may be intimated to this office.

B.  Clarification on acquiring fresh positions during the delivery period:

8.       It has come to our notice that there is misunderstanding among the market participants on the various directives issued by the Commission on acquiring fresh positions during the delivery period.  It is clarified that the directions restricting acquiring of fresh positions during the delivery period or last five days of the contract period are applicable only to contracts which provide for settlement other than by compulsory delivery. The directions in this regard were issued to the Exchanges on 24.3.2006.

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Dated the 31^st August, 2006

Forward Markets Commission

                                                    ‘Everest’, 3^rd Floor,

                                                    100, Marine Drive,

                                                         Mumbai-400 002