Journalism of Courage
The finance ministry plans to provide more teeth to the commodity market watchdog Forward Markets Commission with powers to register, cancel, suspend and debar registrations of intermediaries.
The proposals are a part of draft guidelines on Forward Contracts (Regulation) (Intermediaries) issued by the finance ministry for consultation with stakeholders.
“A need was felt to strengthen the regulatory framework by empowering the FMC to effectively regulate the intermediaries of the commodity derivative markets.” said an official statement, adding that the government is already working on strengthening the regulatory framework of the commodity derivative markets as well as empowering the FMC.
The move comes after the Rs 5,600 crore payment crisis was detected in National Spot Exchange Ltd (NSEL) in August last year. Since then, the FMC has been transferred to the finance ministry from the consumer affairs ministry. But unlike the capital markets regulator Sebi, FMC is not an autonomous body.
The draft rules on which public comments have been sought within the next 21 days, have proposed that registration with the FMC would be mandatory for all entities that wish to function as intermediaries. They would also be expected to abide by the regulator’s code of conduct.
