The Hindu Business Line : FMC to get more powers, autonomy soon

THE Forward Markets Commission (FMC), the commodity futures trading regulator currently working under the Union Ministry of Consumer Affairs, will shortly get more powers as well as financial autonomy and administrative freedom, said its Chairman, Mr S. Sundareshan.

Interacting with newspersons here at an awareness programme on commodity futures trading, he said the Government has prepared the draft Bill on Forward Contracts (Regulation) Amendment.

The amendments to the Forward Contracts (Regulation) Act 1952 are aimed at strengthening the FMC to protect the interests of the commodity market participants.

The Union Cabinet and Parliament will clear the Bill shortly. Following this, the FMC will have full functional financial autonomy just like the Securities and Exchange Board of India (SEBI), said Mr Sundareshan.

"We are currently working as a department of the Government and it does not provide us the operational freedom. We require full functional autonomy. The most important part is the ability to recruit talented individuals into the organisation and pay them sufficiently to ensure that they stay with and develop the organisation. We require financial autonomy because we should not be constrained by the merely budgetary provisions. We should be in a position to collect some charge from transactions on the commodity exchanges, which will enable us to function with greater freedom to regulate the markets," Mr Sundareshan said.

However, he said the charge on transactions, which is not yet finalised, will be very miniscule that it would not at all affect the participants in the markets.

Stating that the Forward Contracts (Regulation) Act 1952 prevents introduction of `options' in commodities, Mr Sundareshan said the amending the Act would enable the FMC to introduce `options' into the market.

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