Ordinance soon to give more powers to FMC: minister news
25 January 2008

Mumbai: The government will soon promulgate an ordinance to grant autonomy to commodities market regulator Forward Markets Commission.

The decision to issue an ordinance to strengthen legal and regulatory framework of FMC was taken at the cabinet meeting, information and broadcasting minister Priya Ranjan Dasmunshi said.

The ordinance will be placed before Parliament for approval during the coming budget session in February, he said.

The FMC, which currently works under consumer affairs ministry, will become independent and function on the lines of capital market regulator SEBI.

Amendments to the Forward Contracts (Regulation) Act 1952, will give the commission powers to decide on listing and de-listing of commodity bourses and give approval to exchanges to start options trading and other regulatory issues.

The amendments will also allow the commodities regulator to undertake search and seizure operations and initiate steps to stop illegal futures trading.

The ordinance proposes to increase the number of members of the FMC from the current four to nine, including a maximum of three full-time members and a chairman.
 
The amendments would strengthen penal provisions by empowering the commission to impose fines up to Rs25,000 on defaulters from the present Rs1,000.

The ordinance, which will be promulgated shortly, comes in the backdrop of government's decision this fiscal to ban futures trading in staple commodities like wheat and lentils following a steep hike in their prices.


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Ordinance soon to give more powers to FMC: minister