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Dec 22, 2012
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FMC to ban over-leveraging in futures market
In a major blow to the commodity futures markets, the Forward Markets Commission (FMC) is planning to ban extra-leveraging of exposure by members to their clients.The commodity derivatives’ market regulator is set to issue a directive in this regard shortly.In usual practice, commodity exchanges offer exposure of up to 20 times of clients’ deposits. Members, in order to grab business, also allow leveraging of double the exchanges’ limit. This means, clients get exposure of up to 200 per cent of their deposits with a member. This, FMC said, has proven risky for all
Source -
http://www.business-standard.com
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