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Rajkot Commodity Exchange (RCX), one of India’s oldest regional commodity exchanges, is planning to approach regulator, Securities and Exchange Board of India (SEBI) seeking a relaxation in compliance rules.
PB Pathak, Executive Director of the commodity exchange, maintained that common regulations for national and regional commodity exchanges posed a big challenge for the latter.
Net worth challenge“We are fine with the strict regulations. But regulations such as net-worth requirement of ₹100 crore would create a major challenge for a single-commodity regional exchange like ours. A national exchange would be dealing in more than 15 commodities and having high volumes, but our daily average volumes are meagre, at ₹6-7 crore,” Pathak told BusinessLine .
Annually, RCX’s turnover works out to over ₹2,100 crore, whereas SEBI’s requirement is ₹1,000 crore for a regional exchange.
“We have our board meeting on September 30, when we will decide to represent our case before the regulator to relax the norms for net worth,” he added.
RCX, which has about 8-10 active trading members, trades castorseed futures through the age-old open outcry system. The regulator is pushing for electronic trading systems.
On September 27, castorseed December futures were at ₹3,696 per quintal — over ₹15 higher than the previous close of ₹3,680.50.
According to exchange officials, RCX has recognition up to March 2018 and has permission for castorseed futures contracts till December 2016.
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