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As a fallout of the National Spot Exchange Ltd fiasco, the Forward Market Commission may see a change in administrative Ministry from Consumer Affairs to the Finance Ministry.
The Government is considering bringing the FMC, which regulates commodities futures trading, under the Finance Ministry.
If approved, all financial sector regulators will come under the Finance Ministry. Currently, the Commission is under the administrative control of the Consumer Affairs Ministry.
Since the commodity and equity markets are interlinked, and the latter is regulated by the Securities and Exchange Board of India, such a move is expected to help better coordination among the regulators.
It is believed that this issue was discussed at a meeting the Prime Minister had with the Finance and the Consumer Affairs Ministers. Now, a Committee of Secretaries will discuss this proposal, an official source said. Accordingly, there will be a change in the allocation of business rules.
Though the NSEL is not regulated by the FMC, the Commission has oversight power. And now, the FMC has been empowered to supervise settlements of all outstanding one-day forward contracts at the NSEL.
All decisions or orders in this regard will be binding on the NSEL.
shishir.sinha@thehindu.co.in
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