Mumbai: The commerce ministry has asked commodity exchanges in the country having individual foreign equity holding in excess of the 5 per cent cap set by the government to trim their holdings by 30 June 2009.

The overall overseas holding in any single exchange should also not exceed the prescribed 49 per cent ceiling by that time, the commerce ministry said in a press note.

The government allows foreign firms to jointly invest up to 49 per cent in the country's commodity exchanges - 26 per cent through direct investment and 23 per cent in the form of portfolio investment – and has limited individual holdings to five per cent.

''It has been brought to the notice of the government that some of the existing commodity exchanges had foreign investment above the permitted level," the circular stated.

The Intercontinental Exchange Holdings Inc had, in May, said it would have to sell part of its eight per cent stake in the National Commodity Derivatives Exchange (NCDEX) to comply with the rules.

Investment bank Goldman Sachs also holds a 7 per cent stake in NCDEX.

Early this year, NYSE Euronext bought a 5 per cent stake in the Multi Commodity Exchange for $55 million.

''In order to facilitate the existing commodity exchanges to comply with the guidelines notified vide press note 2 (2008), it has now been decided to allow a transition / complying/correction time to the existing commodity exchange(s). The commodity exchange(s) would be required to divest foreign equity equal to the amount by which the cap was being exceeded in accordance with press note 2 (2008). Accordingly, all such commodity exchanges are hereby advised to adhere to the conditions of press note 2 (2008) by 30.6.2009,'' the ministry said.

Further, the press note said all commodity exchanges shall furnish a compliance report informing the foreign investment in the commodity exchange as of 30 June 2009, along with details of equity structure, to the department of industrial policy and promotion, department of consumer affairs, Foreign Investment Promotion Board, the Forward Market Commission and the SEBI.

Non-compliance would be a violation of the Foreign Exchange Management Act, 1999, it added.