In order to regulate commodity derivatives market effectively, there is a need to restructure and strengthen the FMC and also confer upon it more statutory powers, according to the Forward Contracts (Regulation) Amendment Bill, 2006.
The Centre has, therefore, decided to restructure and strengthen FMC broadly on the lines of the Securities and Exchange Board of India (Sebi) and make necessary amendments in the Forward Contracts (Regulation) Act, 1952, for the said purpose, as per the statement of objects and reasons of the bill.
It seeks to increase the maximum number of members of FMC from four to nine, out of which three will be whole-time members, besides a chairman.
Powers would be conferred upon FMC to levy fees. The bill also provides for constitution of FMC general fund to which all grants, fees and all sums received by the commission shall be credited, except penalty, and apply the funds for meeting the expenses of the commission.
The Centre will have powers to issue directions to the FMC on the matter of policy and to supercede the FMC in certain areas, the bill said. According to the bill, many of the existing provisions of the Act have become redundant in view of rapid expansion of the commodity futures market.