Section 131D in Karnataka Agricultural Produce Marketing Act 1966
131D. Establishment of Spot Exchange.
(1)No person shall establish and run a spot exchange for trading in notified agricultural produce without obtaining a licence under this section.(2)Subject to such conditions and such fees and security as may be prescribed the Director of Agricultural Marketing may grant licence to setup spot exchange for providing trading facilities in the notified agricultural produce.(3)Any person desires to setup a spot exchange may apply to the Director of Agricultural Marketing in such manner along with such fee and security as may be prescribed.(4)The spot exchange shall,-(i)have online trading and clearing system with national reach;(ii)ensure efficient clearing settlement and guarantee system;(iii)ensure transparency in operations and decision making related to entire operations;(iv)provide for delivery of underlying commodity backed by a warehouse receipt system;(v)provide the following services:-(a)electronic spot trading facility in notified agricultural produce;(b)grading quality certification and standardization of commodities;(c)facilitating collateral financing and borrowing against warehouse receipts;(d)customized service relating to storage transportation logistics handling and shipment;(e)procurement and disposal of commodities through online trading system;(f)market intelligence reports.(5)The spot exchange may collect fees relating to membership VSAT annual subscription etc. from the members.(6)Trading delivery clearing and settlement shall take place on such terms and conditions as may be prescribed.(7)The spot exchange shall provide guarantee performance of all contracts executed on the spot exchange platform. For this purpose it shall maintain a settlement guarantee fund. Notwithstanding any default of any member spot exchange licensee shall be responsible for collection and payment price to sellers the payment has to be made as per the schedule prescribed.
