Regulator Sebi has allowed India Pepper and Spice Trade Association (IPSTA) and Rajkot Commodity Exchange (RCX) to cease operations as commodity derivative bourses after they voluntarily decided to exit.
Kochi-based IPSTA had recognition as a commodity derivative exchange in respect of futures trading in pepper while that of RCX was for forward trade in castor seed contracts.
Both entities have been allowed to cease to exist as bourses after they complied with the requirements of exit policy for commodity derivatives exchanges, as per two separate orders.
There was no trading at IPSTA since April 2016 and in the case of RCX, trading was discontinued in December 2016.
The boards of the two respective exchanges had resolved to take formal voluntary exit as recognised commodity exchanges.
Among others, IPSTA had submitted to the Sebi that there was no trading activity at its platform for more than twelve months and that the market of pepper was also not conducive.
In the case of RCX, the watchdog observed that it did not have the required 5 per cent of the nationwide market share of castor seed for two consecutive years — 2015-16 and 2016-17.
The regulator has also directed them to not use the expression "exchange" or any of its variant in their names and to avoid any representation of present or past affiliation with the stock exchanges in all media.
As per Sebi, IPSTA and RCX have "substantially" complied with the conditions contained in the exit circular and submitted written undertakings that they do not have any third party or undisclosed liabilities in respect of futures trading.