Govt weighs more autonomy for FMC

HYDERABAD: The Forward Contract and Regulations Act of 1952 is expected to be amended in the next session of Parliament and this will give the commodity regulator, the Forward Markets Commission (FMC), financial and functional autonomy, according to Anupam Mishra, director of FMC.

FMC and leading commodity exchanges including NCDEX are also looking at roping in the services of NGOs, micro finance institutions and banks to promote futures trading to small and marginal farmers. Addressing a press meet on Monday, Mr Mishra said, the amendment of the Act would also help introduce options trading in the market. ���Besides, FMC will get the status of an autonomous regulator on the similar lines of Sebi, IRDA and Trai,��� he said.

As part of the new initiatives taken up to help volumes grow, FMC has also proposed to restructure the shareholding pattern of exchanges. ���The proposal along with the FCR amendment has been under the consideration of the parliamentary standing committee and we expect them to come out with the new guidelines soon. This will help define the holding pattern of FIIs and the permit limit of FDI in the commodity market,��� he said.

At present, he said, no guidelines exist for the FII and FDI holding pattern. ���If proper guidelines are in place, it will give depth and liquidity to the market. However, in case of FIIs, Sebi also has to make certain amendments in its rules,��� he added.

Talking about the trade volumes, PH Ravikumar, MD & CEO of NCDEX said, they were in talks with MFIs and NGOs to act as facilitators to bring farmers together. ���Currently, the contract size of agri commodity is one truckload. This is big hurdle for the small and marginal farmers and their participation in the commodity futures market is also low. With the help of MFIs and NGOs, they can come together and pool in their agri produce to meet the stipulated volume standard,��� he said.

They are also in talks with the RBI to make available the services of banks as hand holding agencies for farmers. ���Most banks have a strong base among farmers as they issue kisan credit cards and other services,��� he said. Currently, over 90 commodities are being traded in various commodity exchanges and daily volumes of trade touch Rs 12,000 crore. ���The total value of trade in the market in 2005-06 was Rs 21.54 crore, up by 374% compared to previous year. In the last nine months of this fiscal, the total volume of trade has crossed Rs 27 lakh crore,��� Mr Mishra said.