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Moneymunch: SEBI eyes on MCX Dabba trading and complaints

dabba trading

Securities and Exchange Board of India, Sebi

What is Dabba trading (Definition): The investor’s trades [buy/sell orders] do not executed on stock exchanges system but in the dabba operators books only.

Top reason for dabba trading: mainly to save on tax and trading fees. But traders don’t know, dabba trading or trading in commodity (MCX / NCDEX) futures outside the FMC-regulated exchanges is illegal as per the Forward Contracts Regulation Act (FCRA), 1952.

Dabba trading is also risky as it does not provide protection against counterparty default risk as guaranteed by commodity futures exchanges for trades done on them.

Market controller Sebi may break down on dabba trading that is said to be out of control in cities like Rajkot, Ahmadabad, Mumbai and Indore, following (consumer) complaints from market participants.

Dabba trading activities is 70% more existing in equity trading rather than commodity market. Look below image:

Cash turnover increases

(GIVEN by LOKESHWARRI SK BL RESEARCH BUREAU)

SEBI is asking, are Gujaratis losing interest in equity trading?

SEBI sources said: finding exact information from market participants about such illegal activities, has furthermore written to the state governments seeking information in this regard.

If you notice any illegal commodity futures market activity, please report to:
Forward Markets Commission, Everest, 3rd Floor, 100, Marine Drive, Mumbai 400 002, Tel: 022-227 953 00, Fax: 022-2281 2086, Email: [email protected]

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3 Comments

  1. Good Evening Sir,
    I am paid subscriber member of your investment advices. I wish to know where to go for register complaints against Dabba trading because here so many virtual trading are running.
    Thank you!

  2. Dear Sir,

    Too much unrealistic speculation is going into NCDEX in Guar and Guar Gum business. Without any concrete reason Guar market rise 40% in last three weeks. which has badly impact on export business which is already passing thru worst conditions for last 5 years. Everyday upper circuit and lower circuit are putting in this commodity.

    Please do needful in this matter and stop these activities in NCDEX otherwise our nation will have to loose FOREX form this business forever.

    Thanks
    Ashok burad

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