Millennium Post

Cabinet clears FCRA Bill to empower FMC

Giving a reform boost to commodity markets, the Indian government on Thursday approved the FCRA Bill that seeks to provide more powers to sectoral regulator Forward Markets Commission  [FMC] and allow a new category of products.

'The Cabinet has approved the Forward Contract Regulation Act  [Amendment] bill. It will give more teeth to FMC. Farmers will also benefit,' Indian food minister K V Thomas said. FCRA bill, considered vital for the development of futures trade, aims to provide financial autonomy to the regulator.

FMC can become self-sufficient by collecting revenues in form of fees from exchanges after the passage of this bill in Parliament, Thomas said. The retirement age of FMC chairman and its members will go up to 65 years from 60 years, if Parliament passes the bill. The number of members in FMC has also been proposed to increase from four to nine.

The Bill also seeks to facilitate entry of institutional investors and pave the way for introduction of new category of products. The Bill seeks to increase penalty on defaulters to Rs 50 lakh from the existing Rs 25 lakh.


The clearance of Forward Contracts Regulation Act  [Amendment] Bill 2010 by the Union cabinet on Thursday is a boost for the much-needed policy reforms in the Indian commodity market, MCX MD and CEO Shreekant Javalgekar said in a statement. Javalgekar said the bill, once passed, will bring the Indian commodity trade on par with global practices.

The amended FCRA will not only strengthen the Indian commodity market regulator, but also pave the way for introduction of new tools for hedging and price risk management, he added.
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