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Journalism of Courage
The government is planning to bring electronic commodity spot exchanges under Forward Markets Commission FMC regulations.
The Department of Consumer Affairs Ministry wants FMC to regulate spot exchanges. We have received the draft regulation and hope it will be cleared soon, Food Minister KV Thomas said here today.
Forward Markets Commission has been regulating futures trading since 2003,when hedging in commodities was allowed after 40 years.
The online spot trade,however,remained largely self-regulated,as they were exempted from reporting to FMC under the Forward Contracts Regulation Act.
The country has three spot online commodity exchanges,namely,Financial Technologies-promoted National Spot Exchange Ltd NSEL,the National Commodity amp; Derivatives Exchange-promoted NSpot and Ahmedabad-based National Multi Commodity Exchange NMCE.
These exchanges were set up to provide state of art trading,delivery,and settlement facilities in various commodities.
The physical spot trade of commodities in mandis are currently regulated at the state level by the Agricultural Produce Marketing Committee APMC.
In most states,this body is unable to do so,because of age-old provisions and lack of technical skills for handling electronic trade.
