Will allow option trading in goods and commodity derivatives
New Delhi, March 21
A Bill to strengthen and restructure the Forward Markets Commission (FMC) and also bestow upon it more statutory powers was introduced in the Lok Sabha today.
It will also allow option trading in goods and commodity derivatives.
Currently, the Forward Contracts (Regulation) Act 1952 (FCRA) prohibits option trading in goods.
FMC is now the regulator of the commodity futures market. To regulate the commodity derivatives market efficiently, the Government now wants to restructure and strengthen the FMC broadly on the lines of the Securities and Exchange Board of India.
The Forward Contracts (Regulation) Amendment Bill 2006, which was piloted by the Minister of State for Agriculture, Mr Akhilesh Prasad, seeks to amend FCRA to provide for corporatisation and demutualisation of recognised associations in accordance with the schemes to be approved by the FMC.
It also provides for an increase in the maximum number of members of FMC from four to nine, out of which three to be whole-time members and a Chairman.
Besides conferring powers upon the FMC to levy fees, the Bill provides for constitution of the FMC general fund to which all grants, fees and all sums (except penalty) received by the FMC should be credited except penalty.
The Bill also makes provision for registration of members and intermediaries. Moreover, the FMC would also be exempted from payment of tax on its wealth, income and profits or gains.
The Bill also provides for investigation, enforcement and penalty in case of contravention of the provisions of FCRA.