Commodities Exchange and Future Contracts Rules, 2005
The Commodity Exchange and Futures Contracts Rules, 2005 were promulgated by the Federal Government in exercise of the powers conferred by Section 33 of the Securities and Exchange Ordinance, 1969 (XVII of 1969). Most historians agree that the adoption of gold coins as a medium of exchange in medieval Europe played a key role in the development of formal markets for trading commodities. Regions throughout Europe began making their own specialized gold coins and trading with merchants returning from the East Indies and Asia. These developments led to the need for centralized exchanges. A commodity exchange is an organized, regulated market that facilitates the purchase and sale of contracts whose values are tied to the price of commodities (e.g., corn, crude oil and gold). The exchanges stipulates these features of the contract; quality, quantity, price, and delivery. The members and management of commodities exchanges are responsible for establishing and enforcing rules and regulations that govern the trading of these st andardized commodities contracts. Every commodity future contract shall be registered with the commission under these rules to become eligible for dealing on an exchange. No person shall transact any business in commodity futures contract on any exchange unless he is a broker. The brokers are subject to certain restriction imposed by the SECP.
