Pawar tables FMC Bill in Lok Sabha

Agriculture Minister Sharad Pawar on Thursday introduced in Lok Sabha a bill vesting more powers with the Forward Markets Commission, the commodities market regulator, which would pave the way for trading in options and indices.

The bill seeks to replace the FC(R) Amendment Ordinance that was promulgated on January 31.

An ordinance, which comes into force after the President's consent, has to be passed by the both houses of Parliament within six month of promulgation.

The ordinance gave autonomy to the Forward Markets Commission and similar powers enjoyed by the capital market regulator""the Securities and Exchange Board of India.

It gave the central government overriding powers against the FMC in matters of policy, but allowed the FMC to permit trading in options, impose stricter penalties, take action against offenders and levy fee.

The ordinance also allowed FMC to increase the number of members to nine from four with up to three whole-time members and a chairperson.

Pawar, meanwhile, withdrew an earlier FC(R) amendment bill tabled in Parliament in 2006.

"In view of the rapid acceleration of growth in commodity futures market in the past five years, there has been an imperative and urgent need for putting in place an updated and effective regulatory system," the new bill stated.

Commodity futures turnover has risen to Rs 35.96 trillion in the first 11 months of the current financial year, up 8 per cent from a year ago.