Other modalities like mergers of existing commodity exchanges, setting up of a national commodity exchange and multi-commodity trading exchanges will be left to the discretion of the exchange managements to decide. The government is certainly in favour of these issues but it wants the existing exchanges and the trade to decide and voluntarily come up with the proposals before materialising them at their own initiative. At present there is nothing in the existing laws to impede these issues, the sources in the ministry stated.

The sources stated that in fact the government is in favour of developing futures trading in as many commodities as possible in the country. But the exchanges should be viable. The exchanges, therefore, should decide onthemselves to go for trading in multiple commodities and mergers of some exchanges and a national commodity exchange.

At present there are 26 commodity exchanges in the country. Some of the exchanges, not so viable financially, should go for mergers with some more existing viable exchanges or opt for collaborations for trading with some viable international exchanges.

The soyabean commodity exchange at Indore and coffee futures exchange at Bangalore can work out trading collaborations with some viable international commodity exchanges like the Chicago exchange.

Presently futures trading are allowed in commodities like pepper, turmeric, potato, gur, castorseeds, castoroil, raw jute, jute goods, cotton, soyabean and coffee. The government is also contemplating on allowing futures trading in other commodities are reviewing their availability and price situation.

Till last year, domestic futures trading was permitted in castorseeds, turmeric, pepper, gur, potato and hessian. Besides this, trading innon-transferable specific delivery (NTSD) contracts is permitted in cotton, raw jute and jute goods.

Transferable specific delivery (TSD) contracts are also permitted in raw jute and jute goods. In recent times government have approved resumption of domestic futures trading in cotton (ginned and baled) and jute goods.

The East India Jute & Hessian Exchange Ltd, Calcutta has been selected for futures trading in jute goods and trading has commenced in March 1998. The East India Cotton Association, Mumbai has been selected for undertaking futures trading in cotton and Soyabean Processors Association of India, Indore has been allowed futures trading in soyabean, soyabean cakes and oil.

International Pepper Futures Exchange at Kochi has been allowed dollar denominated transactions and Bombay Oilseeds & Oils Exchange Ltd, Mumbai has been approved for upgradation to an international exchange.

The sources in the ministry stated that in order to facilitate proper functioning of the commodity exchanges in thecountry, the hurriedly tabled the amendments to the Forward Contracts (Regulation) Act, 1952 in Rajya Sabha on the last day of the winter session.

Other necessary bills proposed by the Union food ministry like amendments to the Essential Commodities Act, 1955, Bureau of Indian Standards Act, 1986 and Consumer Protection Act, 1986 were held up for introduction of the proposed amendments to the Forward Contracts (Regulation) Act, 1952.

The government proposes to shortly bring in Ordinance on proposed amendments to the EC Act after Cabinet approval.

The amendments to the FCR Act, 1952 seeks to strengthen the Forward Markets Commission (FMC) on basis of the recommendations of the high powered Kabra Committee and subsequently the expert group headed by the secretary, consumer affairs, N N Mookerjee.

The proposed amendments to the FCR Act seeks to redefine specific delivery contracts and non-transferable specific delivery contracts so as to make delivery of goods compulsory and to make performance of suchcontracts by any means, other than delivery, punishable. The amendments seeks to enhance the quantum of fine from Rs 1,000 to Rs 5,000.

It has sought to recognise the dealings through brokers in addition to the members of the commodity exchange. For this, it is proposed to have a definition of `broker' and a substantive provision recognising only registered broker as a person eligible to trade in commodity exchange in addition to the members of the exchange.

The Amendments has proposed to increase the period of delivery of goods and payment under ready delivery contracts from 11 days to 30 days. It has also proposed a definition of futures contract which is otherwise not mentioned in the original Act. The amendments has sought to remove prohibition on options in goods under Section 19 and to provide for regulation of options.

Significantly, the amendments with a view to strengthen Forwards Markets Commission has sought to increase the maximum number of members of Forwards Markets Commission from four toseven. The object is to appoint four full time members and three part time members from the Union ministries of law, finance, consumer affairs, representatives of trade and experts known for their practical knowledge of futures trading.

It has been further decided to upgrade the post of the chairman from the present level of joint secretary in Union government to the that of additional secretary and that of a member from the present level of director to that of a joint secretary in the Union government.

Since presently only two full time members including the chairman are being appointed the annual expenditure on account of two additional full time members will be approximately Rs 6 lakh. Besides this, there will be supporting staff and other incidental expenditure. There will be, however, no recurring and non-recurring expenditure.

Clause 12 enlarges the rule-making powers of the central government and empowers it to make rules regarding the manner in which applications for certificate of registrationmay be made under Section 14D and levy of fees in respect of such application and the terms and conditions subject to which the certificate of registration may be granted under that section.

Section 14E empowers the central government to make rules regarding the manner in which certificate of registration may be suspended or cancelled.

The matter in respect of which rules are to be made are generally matters of procedure and administrative detail and it is not practicable to provide for them in the Amendment Bill itself. The delegation of legislative procedures is, therefore, normal in character.