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FMC bans future months trading in Guar Gum & Guar Seed

22 Mar 2012 Evaluate

Forward Markets Commission (FMC), the futures market regulator has banned Guar Gum & Guar Seed trading in future months contracts with immediate effect. No fresh positions (including intra-day) will be allowed in respect of Guar Gum and Guar Seed April, May, June and July 2012 expiry contracts from March 22, 2012 till the expiry of these contracts. Only squaring off of existing positions will be allowed. The FMC had already disallowed August and September futures.

However, the contracts for the next season, i.e., for expiries from October 2012 onwards will be launched as per the contract launch calendar. The October futures should begin from April onwards.

The prices of Guar Gum & Guar Seed have surged to record high and in last about a year the prices have increased manifold prompting the regulator to curb the speculative trading. It has further warned that any financial gain made by taking fresh position in violation of the directive will not be payable to the violator. Instead, it would be deposited in the investment protection fund of futures exchanges.

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