The Securities and Exchange Board of India (SEBI) has directed the National Commodity & Derivatives Exchange Limited (NCDEX) to not launch any new mustard seed contracts till further orders.
In an order issued early morning on Friday, the watchdog further said that the commodity exchange cannot allow any new position to be taken in the ongoing contracts and only squaring off of positions can be allowed.
The capital markets regulator has directed the exchange to implement the directions with immediate effect.
This assumes significance as mustard seed features among the top traded commodity on the bourse. Data from NCDEX shows that while the total volume on Thursday was pegged at ₹1,878 crore, mustard seed contracts accounted for ₹263.5 crore of the total pie.
The latest development comes nearly two months after a similar ban on chana futures.
At times, the regulators and policy makers have resorted to such actions when they believe that excessive speculation or any other activity in the commodity derivatives markets is driving up the prices in an artificial manner that can impact the spot prices as well.
Copyright©2022 Living Media India Limited. For reprint rights: Syndications Today