The government today issued draft rules to give the commodity markets regulator FMC (Forward Markets Commission) more powers to effectively regulate the intermediaries of the commodity derivatives markets.
Unlike capital markets regulator SEBI, FMC is not an autonomous body. The government is in the process of strengthening the FMC, especially after the Rs 5,600 crore payment scam surfaced at the National Spot Exchange Ltd (NSEL).
"A need was felt to strengthen the regulatory framework by empowering the FMC to effectively regulate the intermediaries of the commodity derivative markets. To enable this, it has been decided to notify appropriate rules by the central government," an official statement said.
Among the guidelines, the Finance Ministry 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.
Public comments have been sought on the draft rules within 21 days.
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