Finance ministry to oversee Forward Markets Commission

New Delhi: Amid the ongoing payment crisis in the National Spot Exchange Ltd. (NSEL), the finance ministry is taking over the regulation of commodity futures markets from the consumers affairs ministry.

add_main_imageA notification to bring commodity markets regulator Forward Markets Commission (FMC) under the ambit of the finance ministry was issued by the government on 6 September.

The consumer affairs ministry had earlier agreed to shifting FMC to the finance ministry as it did not have the adequate manpower and expertise to regulate the complex commodity futures markets. The consumer affairs ministry had been overseeing the functioning of the FMC, which regulates futures trading on 21 commodity bourses, including MCX and NCDEX.NextMAds

The finance ministry oversees operations of several regulators, including Securities and Exchange Board of India (Sebi), Insurance Regulatory and Development Authority (Irda) and Pension Fund Regulatory and Development Authority (PFRDA). Bringing FMC under the purview of the finance ministry will ensure better co-ordination of regulators. The proposal to bring FMC under the purview of the finance ministry was moved last month after a payment crisis of Rs5,600 crore surfaced in the NSEL.

NSEL had to shut down its operation early August, following the government direction in the wake of violation of certain rules.