New Delhi: The Cabinet on Thursday approved the much awaited Forward Contract Regulation Act (Amendment) Bill that aims to give more powers to commodity markets regulator FMC.

Sources said the Cabinet headed by Prime Minister Manmohan Singh approved the amendment Bill which may now be brought in the forthcoming monsoon session of Parliament.

The Bill is essential for the development of commodities futures market as it aims to strengthen the Forward Market Commission (FMC) by providing it financial autonomy, facilitate the entry of institutional investors and introduce new products for trading such as options and indices.

The Parliamentary Standing Committee had demand greater autonomy for FMC that also regulates the three spot online commodity exchanges -- Financial Technologies-promoted National Spot Exchange Ltd (NSEL), the National Commodity & Derivatives Exchange-promoted NSpot and Ahmedabad-based National Multi Commodity Exchange (NMCE).

It 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.