FMC may take up futures rejig at today's meet

Forward Markets Commission (FMC) is likely to discuss revamp of commodity futures markets in the country at its meeting with commodity and trade bodies Wednesday, an official from a trade association said on Tuesday.

The meet will be held in the backdrop of repeated criticism of commodities futures trading in the recent past by various sections of the economy.

Chief ministers of Congress-ruled states are demanding a ban on futures trade in essential commodities.

The unprecedented rise in prices of essential commodities after its listing on exchanges has raised suspicion about FMC's regulatory functions.

However, according to FMC Chairman S. Sundareshan, the regulator has done a good job despite having limited powers under the Forward Contracts (Regulation) Act 1952.

The issue of banning futures trading came to the forefront after Congress Party President Sonia Gandhi expressed concern about rise in prices of essential commodities.

Last week, Union Agriculture Minister Sharad Pawar also said that he is seriously rethinking futures trading in some essential commodities.

An official from the edible oil industry said "we are for future trading in commodities, but there are lot of loose ends, which need to be plugged by the regulator."

FMC has permitted a number of contracts for trading. However, only a few of them have liquidity.

Hence, there is an urgent need for the regulator to restructure the futures markets, he said.