The Forward Markets Commission, commodity market regulator, expects the much-delayed Forward Contracts (Regulation) Amendment (FCRA) Bill 2010 to be cleared in the winter session of Parliament.
Mr B. C. Khatua, Chairman, Forward Markets Commission, said the Bill is currently being considered by the Standing Committee of Parliament and it is expected to hold another meeting with stakeholders before submitting its final report.
“We were expecting the Bill to be introduced in the monsoon session beginning July, but now it looks very unlikely and may be taken up in the winter session that starts in November,” he said.
The Bill was cleared by the Cabinet in September and was referred to the Standing Committee before being introduced in Parliament. Passage of the Bill in Parliament will enhance the status of FMC as an autonomous body like the capital market regulator SEBI. It will pave the way for introduction of new products such as options and wider participation by banks, mutual funds and institutional investors.
The Bill has undergone various changes since it was first introduced in 1998 with three standing committees submitting their reports.
Uniform KYC
The FMC is considering to introduce a common know your customer (KYC) for all commodity exchanges. The regulator is also weighing the option of making delivery of commodities fungible among the five exchanges. Fungible delivery will allow an investor with open position on an exchange to deliver the commodity at any of the exchange accredited warehouse. For this to happen, all the exchanges should have a uniform contract specification.
Commodity exchanges have also moved the regulator to alter the trading hours of the first session between 9 am and 6.30 pm against 10 am to 5 pm and observe holiday on Saturdays.
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