The proposed FICE, covering majority of the commodities traded in the country, will pave way for the much-awaited software grid/platform of multi-commodity exchange in the country. Chiefs of these exchanges are expected to meet sometime later this month to arrive at a consensus on various related issues before they meet the new chairman of the Forward Markets Commission (FMC), Kailashchandra Mishra. Mishra took charge of FMC from Vijay K Aggarwal on July 14.

The solidarity among majority of the existing comexes comes at a time when the FMC, the apex regulatory body for commodity futures, is said to have received over 22 new applications to set up forward trading in edible oils sector. The applications were in response togovernment's invitation this May from commodity trade associations to set up futures exchanges in oilseeds complex (seeds, oils and de-oiled cakes) in eight oilseeds.

These new associations intending to kick off trading in edible oils are expected to meet the stringent norms outlined by the the government in consultation with the FMC. It remains to be seen how many of these applications meet the norms when FMC begins clearing them later this month.In the first meeting of the comexes with the then FMC chairman Vijay K Aggarwal on February 25, eight comexes had orally agreed to join the proposed federation. Included in the list of comexes who have decided to join the proposed FICE are: Ahmedabad Commodity Exchange (ACE), Ahmedabad; Bombay Oilseeds and Oils Exchange (BOOE), Mumbai; Coffee Futures Exchange of India (COFFIE), Bangalore; East India Cotton Association (EICA) Mumbai; East India Hessian Exchange (EIHE), Calcutta; Indian Spice Traders' Association (IPSTA), Cochin; Soyabean Processors' Association(SOPA), Indore and the three gur exchanges at Hapur, Bhatinda and Muzaffarnagar in North India.

Chiefs of these 10 comexes are expected to meet in Mumbai sometime later this month to thrash out various vital issues like the composition of the board for the proposed FICE, the memorandum and articles of association and rules and regulations for the common platform, all of which could help members of these comexes trade in futures of more than one commodity on one platform.

A leading consultancy firm is also likely to be appointed to help the organisers kick off the proposed FICE at the earliest. More than 1,500 members of these 10 comexes are said to have committed Rs 10,000 each to the kitty of the proposed FICE. The EICA has already committed its cotton exchange premises at Sewree (central Mumbai) for the administrative related functions.

Former FMC chairman Aggarwal had, on the indications from the government, mooted the idea of merger of comexes to set up multi-commodity exchange. However, given thediverse nature of the product and its by-product traded on each of the exchanges and even the sentiments attached of the related members of each of these exchanges, it was rather difficult for merger of the exchanges. And therefore, the idea of FICE.

Meanwhile, the government had fixed June 30 as the last date for all new applications from commodity trade associations. However, the date was extended after the cabinet approved the forward trading in rice bran and oilseeds complex of eight oilseeds like rapeseed/mustard, groundnut, sunflower seed, cottonseed, copra/coconut, sesamum, safflower.

The proposals for the new comexes will be considered under the Forward Contracts (Regulation) Act, 1952 and the applicants will have to give details on the method of trading, clearing, guarantee, delivery, customer protection, and management structure to the Department of Consumer Affairs in the Food Ministry.