Tuesday, December 07,
The Government on Monday introduced in Lok Sabha a new Bill that would allow trading in options in goods and new generation of commodity derivatives so as to provide wider opportunities for risk management.
This Bill—The Forward Contracts (Regulation) Amendment Bill 2010—was introduced by Mr K.V. Thomas, Minister of State for Agriculture.
It also seeks to restructure and strengthen the Forward Markets Commission (FMC) broadly on the lines of the Securities and Exchange Board of India (SEBI) and confer upon it more statutory powers, besides the status of a body corporate. Once the Bill is enacted, the FMC can function as an autonomous commodity regulator. Currently, FMC is a statutory body under the Ministry of Consumer Affairs, Food and Public Distribution.
Also, the Bill recognizes expressions such as ‘demutualization’ and ‘corporatization’, which could pave the way for restructuring of the commodity exchanges.
It also provides for constitution of a fund called the ‘Forward Markets Commission General Fund’ to which all grants, fees and all sums received by the commission except penalty will be credited. The funds will be applied for meeting the FMC’s expenses.
The Bill also specifies the Securities Appellate Tribunal (SAT) as the appellate forum for orders passed by FMC. All appeals from the order of the SAT will lie with the Supreme Court.
Also, specific provisions have been introduced in the Bill to exempt the FMC from payment of tax on wealth, incomes, profits or gains.
Source: The Business Line
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