The Government has decided to grant more powers to the Forward Markets Commission (FMC) to tide over the crisis that has arisen out of the National Spot Exchange Ltd (NSEL) imbroglio.
Official sources said a notification is expected to be issued soon by the Consumer Affairs Ministry to empower FMC to deal with the NSEL settlement issue. At present, the FMC does not have powers to regulate spot exchanges.
Sources clarified that the regulatory powers being granted to FMC was only to deal with the NSEL fiasco. Meanwhile, the Government is also expected to come out with regulatory guidelines for spot exchanges.
Giving more powers to FMC is aimed at instilling confidence among both buyers and sellers who are caught in the crisis to make settlement in the marketplace under the regulators’ supervision.
The new notification will be issued under the powers that the Centre has under the Forward Contracts (Regulation) Act 1952. Sources declined to comment on the exact nature of additional powers to be given to FMC.
Last week, the Government had asked the forward market regulator to probe the NSEL issue following the suspension of trading by the spot exchange triggering payment crisis. See also Page 4