New Delhi : In its first major crackdown on irregularities in commodities derivatives market, regulator the Securities and Exchange Board of India (Sebi) on Wednesday barred 16 brokers and traders from the securities market for manipulation in castorseeds trading at NCDEX.
The barred entities include some well-known names in the commodities market and include Mid India Commodities, Neer-Ocean Multitrade, Investmart Commodities, Leo Global Commodities, Stride Multitrade, Vijay Saraf, Sisne Polymers and Ruchi Global Limited.
Others having been barred by the Sebi, which began regulating commodities market in September last year following merger of erstwhile regulator FMC with it, are Bharat Foods Cooperative, Tanisha Multi Trading, Anju Jain, Piyali Trading, Vartika Mercantile, Secunderabad Oils, UKS Oils and Narsinpuria Korodimal. These entities had either traded or facilitated trade of castorseed contract on leading commodity bourse NCDEX (National Commodity and Derivatives Exchange).
NCDEX had suspended trading in Castor Seed Contracts on January 27, 2016, pursuant to which Sebi also launched its probe in respect of trading in these contracts at NCDEX for the period beginning January 1. Sebi found that prices in Castor Seed February 2016 contract at NCDEX fell by around 20 per cent between January 1 and January 27, as against around 14 per cent fall in spot prices for the same period. It was also observed that futures prices of castor seed contracts touched lower circuit of 4 per cent on January 25, 2016 and hit lower circuit of 6 per cent on January 27.
It was also observed that the open interest in February-16 contract increased from 2,16,690 metric ton as on January 7 to 3,38,990 metric ton as on January 11. Further on January 27, the outstanding open interest in February-2016 contract was 2,83,260 metric ton.
