After banning algorithmic (algo) trading in microand mini-contracts in commodities with effect from January 1, the commodities market regulator, the Forward Markets Commission (FMC), has issued guidelines for regulation of algorithmic trading in the commodity futures market.
　　Algorithmic trading refers to trade orders generated using automated execution logic through a computer application.
　　According to the guidelines, which will be effective from April 1, stock exchanges will have to ensure that immediate or cancel orders are not placed through the algo trade route.
　　To promote fair use of the trading platform, there will be some economic disincentives for algorithmic trades based on the order-to-trade ratio. Only a portion of orders placed through trading terminals are executed due to non-fulfilment of certain conditions or cancellation by clients. Based on the daily order-totrade ratio of the client, an additional charge ranging from 1-5 paise will be levied on all algorithmic orders.
　　From the next financial year, commodity exchanges will be able to process 20 orders per second from a user, irrespective of the order size. In case the order-totrade ratio of a member reaches 500 during a trading day, the member will not be allowed to place any order for the first 15 minutes on the next trading day.
　　The FMC has asked commodities exchanges to submit a monthly report on algorithmic trading, including its percentage in total trade and the number of members of using algorithmic trading. Members already using algorithmic trading will need their exchange’s approval by March 31.
　　 REGULATOR WATCH
　　A look at recent rulings which can affect you
　　 BANKING
　　The Reserve Bank of India has asked all non-banking financial companies (NBFCs) to prominently display the details of their grievance redressal officer and that of the local office of the central bank at their branches and offices. The guideline is part of the Fair Practices Code for NBFCs, which was revised to include micro-finance institutions and also to take into account the rapid growth in NBFC lending against gold jewellery.
　　 CAPITAL MARKETS
　　The Securities and Exchange Board of India has increased the maximum initial offering period for mutual fund schemes eligible under the Rajiv Gandhi Equity Savings Scheme (RGESS) to 30 days from 15 days. The RGESS is a tax-saving scheme notified by the government in November 2012.
　　 COMMODITIES
　　For cost-effective and expeditious resolution of investors’grievances in the commodities futures market, the Forward Markets Commission has asked exchanges not to ask for any fee or deposit from their clients when they raise disputes with claim or counter-claim up to Rs 10 lakh. Expenses for such arbitrations would be borne by the exchanges.
　　 INSURANCE
　　The Insurance Regulatory and Development Authority has allowed insurers to have a maximum of 12% and 15% equity in a company, depending upon the size of the funds controlled by them. Earlier, the limit was 10%. The regulator said increasing the limit would not affect management of investments by insurers, given the size of funds managed by them.

相關(guān)熱詞搜索：Algorithmic Levy Trade Commodity