FMC to ink regulation pact with US body

In its first-ever, proactive approach for better regulation, the Forward Markets Commission (FMC) is all set to sign an information-sharing agreement with the Commodity Futures Trading Commission (CFTC), the commodity futures and options regulator in the United States.

The agreement would be signed on Wednesday afternoon between the representatives of FMC and CFTC in Mumbai.

"This is the first-ever such understanding with any regulator and the second agreement with any financial or regulatory body abroad, said Anupam Mishra, director, FMC.

"We had signed the membership agreement with The International Organisation of Securities Commissions (IOSCO), the Spain-based security market regulator, two months ago," Mishra added.

Until now, Securities and Exchange Board of India (Sebi), the capital market regulator, was the only member of IOSCO.

According to the agreement, past experiences and problems while launching new contracts would be shared. Apart from that, if need be, the regulator would also facilitate training on commodities trade on various platforms. Technical assistance, cooperation on smooth trade, among others are the major purpose of the agreement.

The modalities of mutual cooperation between the two regulators would be worked out later, said Mishra, adding, "Once the agreement is signed, we would be able to approach CFTC for its support on any front we like, Mishra said.

The American Congress created the CFTC in 1974 as an independent agency with the mandate to regulate commodity futures and options markets in the USA.

CFTC's mission is to protect market players and the public from fraud, manipulation and abusive practices related to the sale of commodities and financial futures and options and to foster open, competitive and financially-sound futures and options markets.