06 Nov 2013 Last updated at 07:11:36 GMT
NEW DELHI (Scrap Monster): The Forward Markets Commission (FMC)- the commodity market regulator in India has decided to abolish the 5% additional margin on future contracts of gold and silver traded on the National Exchanges due to less volatility in prices of these commodities.
The Commission’s circular states that the additional margin has also been removed for crude oil, brent crude oil, natural gas, aluminum, copper, lead, nickel and zinc contracts traded on the six national commodity exchanges till further orders, since price volatility for all the above commodities has subdued in the recent past.
The commodity market regulator had imposed the 5% additional margin on gold, silver, crude oil, brent crude oil and natural gas on August 29th, a day after gold touched its all-time high of Rs 34,500 per 10 grams. The additional margin on base metals such as copper, lead, nickel and zinc was imposed with effect from September 2nd, when market witnessed extreme price fluctuation. The FMC had also raised the initial margin on gold futures from 4% to 5% of the contract value effective September 2nd.
The FMC circular to Exchanges state that the slashed margin will be effective form 7th of this month.
Forward Markets Commission (FMC) headquartered at Mumbai, is a regulatory authority for commodity futures market in India. It is a statutory body set up under Forward Contracts (Regulation) Act 1952. The Commission functions under the administrative control of the Ministry of Finance, Department of Economic Affairs, Government of India.
Author: Paul Ploumis