New Delhi: The Commodity market regulator
FMC has asked brokers to keep a close watch on "inactive
trading accounts" to avoid possible misuse and warned that
failure to do so would attract penalty.
"To curb manipulation of inactive trading accounts, we
have asked members (brokers) of the respective exchanges to
keep a very close watch on inactive clients," Forward Markets
Commission (FMC) Chairman B C Khatua said to a news agency.
Monitoring of such inactive accounts will help avoid
their undue influence on the commodity market and also on
active clients, he said.
According to FMC, inactive client are those who have not
executed any traction during the last six months.
The FMC said it has issued a directive to commodity
bourses asking members to follow certain guidelines on how to
treat inactive clients and activate them again.
The NMCE has already issued a circular in this regard
while other three exchanges — MCX, ICEX and NCDEX — are to
follow suit.
"The members should not accept trades in these accounts
without specific written request from the client to re-open
those accounts along-with all required formalities of Know
Your Client (KYC)," it said.
If trade took place in such inactive account without
following the prescribed procedure, the same would be treated
as members' proprietary trade and such member will be liable
for penal action by the exchange or FMC for any misuse of
client account.
PTI
First Published: Monday, December 14, 2009, 18:07