NEW DELHI, February 2: The Department of Consumers Affairs (DCA) has moved the Union cabinet for SEBI-like powers and autonomy for the Forward Markets Commission (FMC).Seeking a complete overhaul of the futures trading system in commodities, the cabinet note calls for repeal of Section 19 of the Forward Contracts Regulation Act which disallows options trading in commodities. Among the other changes sought is a new definition of what is forward trading, a system of penalties for fraudulent behaviour in the markets and a countrywide network of regional offices for the FMC.At present, the FMC is subordinate to the department of consumer affairs in the Union ministry of food. The cabinet note calls for moving a bill in Parliament, empowering the commission with statutory powers under the constitution. The system of appointing a chairman should be the same as is followed for SEBI. The FMC will have a high powered board, with well defined powers, to implement the provisions of the Forward Contracts RegulationAct (FCRA).The department of consumer affairs has kept in mind the recommendations of the Committee on Forward Market (The Kabra Committee) while seeking SEBI-like powers for the FMC. The department has also sought the assent of the cabinet for repeal of the ban on options trading imposed by the FCRA. The scrapping of the ban was essential to ensure that forward trading and futures and options transactions take off smoothly in Indian commodities. Section 19 of FCRA was incorporated by the government in order to ensure that speculative forces did not take control of trading in commodities at a time when the country was trying to improve overall production.
