The Role Of Forward Markets Commission In Indian Commodity Markets

doi:10.29121/granthaalayah.v3.i11.2015.2919

Study

Innovation & MarketsHigh ImpactStrong effect

Indian Commodity Markets: Regulatory Framework Drives Unprecedented Growth

The establishment and active role of regulatory bodies like the Forward Markets Commission (FMC) in India have been instrumental in fostering significant growth and modernization within the commodity derivatives market.

International Journal of Research -GRANTHAALAYAH · 2015

01

Key Findings

01Commodity futures and derivatives play a vital role in price risk management, particularly in the agricultural sector.
02India has a long history of commodity derivative trading, with organized markets dating back to 1875.
03Since 2003, the Indian commodity futures market has experienced substantial growth in terms of exchanges, traded commodities, and trading value, following regulatory reforms.
04The Forward Markets Commission (FMC) regulates numerous national and regional commodity exchanges trading diverse commodities.

02

Application

Design takeaway

Regulatory frameworks are powerful catalysts for market innovation and growth; designers should consider their impact when developing new products or strategies within regulated industries.

How to apply

When designing new financial instruments or market platforms, research the relevant regulatory bodies and their influence on market structure and participant behavior.

Project actions

01When researching a market, always investigate the regulatory bodies involved.
02Consider how regulations might impact the usability or adoption of a designed product.

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Method & Evidence

AimTo investigate the performance and role of the Forward Markets Commission (FMC) in the development and regulation of the Indian commodity market.

MethodLiterature Review and Case Study Analysis

ProcedureThe study examines the historical development of commodity derivatives in India, the establishment and functions of the Forward Markets Commission (FMC), and the subsequent growth in trading volumes, exchanges, and commodities traded since regulatory changes in 2003.

ContextFinancial markets, specifically commodity derivatives trading in India.

Variables

IVRole and performance of the Forward Markets Commission (FMC)

DVGrowth and development of the Indian commodity market (e.g., number of exchanges, trading volume, number of commodities)

CV["Historical context of commodity trading in India","Global trends in commodity markets"]

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Strengths & Limitations

Strengths

+Provides a historical overview of commodity trading in India.
+Highlights the impact of a specific regulatory body on market development.

Limitations

This study is from 2015 and may not reflect the most current regulatory changes or market conditions in India.

Reliability & validity

The study's reliance on available data and literature review suggests moderate reliability. Validity is dependent on the comprehensiveness of the sources used to assess the FMC's performance and market developments.

Think critically

To what extent can market growth be solely attributed to regulation, versus other economic and technological factors?

05

Design Principles

"Market stability and growth are often facilitated by clear and effective regulatory oversight."

Understanding the impact of regulatory frameworks is crucial for designers and businesses operating in or entering commodity-dependent sectors. Effective regulation can create a stable and predictable environment, encouraging innovation and investment in new trading mechanisms and financial products.

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What This Means for Your Design

A government body that watches over the buying and selling of future goods (like crops or metals) can help the market grow and become more organized, making it safer and more useful for businesses.

How to use in your project

1.Reference this study when discussing the impact of regulatory bodies on market development in your design project.

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Add to My Project

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Quick Cite

(2015). THE ROLE OF FORWARD MARKETS COMMISSION IN INDIAN COMMODITY MARKETS. International Journal of Research -GRANTHAALAYAH. https://doi.org/10.29121/granthaalayah.v3.i11.2015.2919 Retrieved from https://designdex.org/study/287c1ea8-e5ca-4857-a2f6-2f0cc0148b9f/indian-commodity-markets-regulatory-framework-drives-unprecedented-growth

Paragraph starter

The Indian commodity market's significant expansion, particularly since 2003, highlights the critical role of regulatory bodies like the Forward Markets Commission (FMC). This demonstrates how effective oversight can foster innovation, increase trading volumes, and broaden the scope of commodities available for derivatives trading, thereby enhancing price risk management capabilities for sectors such as agriculture.

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Source

International Journal of Research -GRANTHAALAYAH

THE ROLE OF FORWARD MARKETS COMMISSION IN INDIAN COMMODITY MARKETS

journal · 2015

View source

Questions about this research

What does the research say about indian commodity markets: regulatory framework drives unprecedented growth?: Regulatory frameworks are powerful catalysts for market innovation and growth; designers should consider their impact when developing new products or strategies within regulated industries. Evidence: International Journal of Research -GRANTHAALAYAH (2015).
Why does "Indian Commodity Markets: Regulatory Framework Drives Unprecedented Growth" matter for design?: Understanding the impact of regulatory frameworks is crucial for designers and businesses operating in or entering commodity-dependent sectors. Effective regulation can create a stable and predictable environment, encouraging innovation and investment in new trading mechanisms and financial products.
How can designers apply this research?: Regulatory frameworks are powerful catalysts for market innovation and growth; designers should consider their impact when developing new products or strategies within regulated industries.
What were the main findings?: Commodity futures and derivatives play a vital role in price risk management, particularly in the agricultural sector.. India has a long history of commodity derivative trading, with organized markets dating back to 1875.. Since 2003, the Indian commodity futures market has experienced substantial growth in terms of exchanges, traded commodities, and trading value, following regulatory reforms.. The Forward Markets Commission (FMC) regulates numerous national and regional commodity exchanges trading diverse commodities.
What research method was used?: Literature Review and Case Study Analysis.
How strong is the evidence?: Evidence strength is rated Strong effect, based on a 2015 journal from International Journal of Research -GRANTHAALAYAH.
What should I do differently in my next project?: When designing new financial instruments or market platforms, research the relevant regulatory bodies and their influence on market structure and participant behavior.
What are the limitations?: The study focuses primarily on the regulatory aspect and market growth, with less emphasis on the specific mechanisms of price discovery or the impact on individual market participants.
Is there evidence that indian commodity affects design outcomes?: The Indian commodity market has seen significant expansion and modernization, largely attributed to the regulatory oversight and development efforts of the Forward Markets Commission (FMC), especially following policy changes in 2003. Understanding the impact of regulatory frameworks is crucial for designers and busine Source: International Journal of Research -GRANTHAALAYAH (2015).
Where does this commodity markets research apply?: Financial markets, specifically commodity derivatives trading in India. It sits within innovation & markets research on designdex.org.