The Union government issued draft rules to empower the commodity market regulator Forward Markets Commission (FMC) on 20 August 2014. The new rules give more powers to FMC for effective regulation of the intermediaries of the commodity derivatives markets.
After the 5600 crore rupees payment scam surfaced at the National Spot Exchange Ltd (NSEL), the government of India is strengthening the FMC. FMC is not an autonomous body.
According to the new draft rules:
• The Finance Ministry of India has proposed to strengthen the Forward Markets Commission (FMC) with the power to cancel, suspend and debar the registration of an errant intermediary.
• FMC would also have the right to inspect books and accounts of an intermediary and take disciplinary actions.
• The ministry has proposed mandatory registration of intermediaries with FMC and procedure for the same.
Forward Markets Commission
• Forward Markets Commission (FMC) is a regulatory authority which is overseen by the Ministry of Finance, Government of India.
• It is headquartered at Mumbai.
• It is a statutory body set up in 1953 under the Forward Contracts (Regulation) Act, 1952.
• "The Act provides that the Commission shall consist of not less than two but not exceeding four members appointed by the Central Government out of them being nominated by the Union Government to be the Chairman."
• The present Commission comprises three members among whom Shri Ramesh Abhishek, IAS is the Chairman, Dr. M. Mathisekaran, IES and Shri Nagendraa Parakh are the Members of the Commission.
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When: 20 August 2014