New Delhi, July 18 (PTI): The Union Cabinet will meet on Thursday to consider a bill to give more powers to the Forward Markets Commision, the commodity markets regulator and introduction of new products like options.
Last week, the Cabinet had deferred the2010 Bill to amend the Forward Contracts (Regulation) Act after opposition from the Trinamool Congress, a key constituent of the United Progressive Alliance.
“The bill is on the agenda of the Cabinet meeting tomorrow,” a source said.
Despite reservation expressed by the Trinamool Congress, sources said that the Food Ministry has not made any changes in the bill.
The bill was introduced in the Lok Sabha in December 2010 and referred to the Parliamentary Standing Committee, which submitted its report on December 22, last year.
The Food and Consumer Affairs Ministry has accepted most of the recommendations of the Parliamentary panel. Sources said the panel has suggested increasing the penalty structure to discourage any violation of provisions of FCRA.
The bill is essential for the development of commodities futures market as it aims to strengthen the regulator FMC by providing financial autonomy, facilitate the entry of institutional investors and introduce new products for trading such as options and indices.
The Parliamentary panel had recommended greater autonomy to FMC, which regulates both spot and futures commodity exchanges.
The panel had also suggested allowing financial institutions and banks, mutual funds, and insurance companies to participate in forward market so as to ensure better price discovery and lower volatility.
Currently, there are five national and 16 regional commodity bourses in the country. Their annual turnover stood at Rs 181.26 lakh crore during the 2011-12 fiscal.