Government considering proposal to shift FMC to Finance Ministry

NEW DELHI: Amid the deepening of payment crisis at the National Spot Exchange, the government is examining a proposal to bring commodity markets FMCunder the purview of the Finance Ministry. 

"We have received such a proposal from the Finance Ministry. We are examining it," a senior Consumer Affairs Ministry official told PTI. 

At present, Forward Markets Commission(FMC) is regulated by the Consumer Affairs Ministry. 

When contacted, a senior Finance Ministry official said "no decision has been taken yet". 

Finance Ministry oversees the operations of several regulators, including Sebi, Irda and PFRDA. 

Bringing FMC under the purview of Finance Ministry will ensure better co-ordination of regulators, officials said. 

The FMC has drawn flak for not being able to ensure smooth functioning of National Spot Exchange Ltd (NSEL). 

NSEL had to shut down its operation earlier this month, following the government direction in the wake of violation of certain rules. It has given a seven-month plan to settle Rs 5,600 crore to investors. 

The Exchange could settle only Rs 92.12 crore out of the scheduled of Rs 174.72 crore payment it had committed to FMC. 

Meanwhile, NSEL today sacked its Managing Director and CEO Anjani Sinha and six other top executives.

Government considering proposal to shift FMC to Finance Ministry

NEW DELHI: Amid the deepening of payment crisis at the National Spot Exchange, the government is examining a proposal to bring commodity markets FMCunder the purview of the Finance Ministry. 

"We have received such a proposal from the Finance Ministry. We are examining it," a senior Consumer Affairs Ministry official told PTI. 

At present, Forward Markets Commission(FMC) is regulated by the Consumer Affairs Ministry. 

When contacted, a senior Finance Ministry official said "no decision has been taken yet". 

Finance Ministry oversees the operations of several regulators, including Sebi, Irda and PFRDA. 

Bringing FMC under the purview of Finance Ministry will ensure better co-ordination of regulators, officials said. 

The FMC has drawn flak for not being able to ensure smooth functioning of National Spot Exchange Ltd (NSEL). 

NSEL had to shut down its operation earlier this month, following the government direction in the wake of violation of certain rules. It has given a seven-month plan to settle Rs 5,600 crore to investors. 

The Exchange could settle only Rs 92.12 crore out of the scheduled of Rs 174.72 crore payment it had committed to FMC. 

Meanwhile, NSEL today sacked its Managing Director and CEO Anjani Sinha and six other top executives.

PMO wants Forward Markets Commission under finance ministry

NEW DELHI: The government is considering the possibility of bringing the Forward Markets Commission (FMC) under thefinance ministry even as the regulator for commodities futures trading struggles to contain the payments crisis at the National Spot Exchange Ltd (NSEL). 

The prime minister's office (PMO), which is monitoring the crisis engulfing the exchange, has asked the finance ministry to respond to the suggestion that has often been debated. 

"The PMO has suggested to the finance ministry that FMC should be brought under its jurisdiction," a government official in the know told ET. The finance ministry is of the view that if the commodities watchdog, which is currently under the consumer affairs ministry, is brought under its ambit then it should be eventually merged with the Securities and Exchange Board of India (Sebi) as it regulates similar financial products. 

The shift could be done through an executive order in the next few days. The PMO has already set up a multiagency task force to investigate the developments at the commodity spot exchange. 

North Block, the abode of the finance ministry, has so far stayed clear of the NSEL crisis saying it has no jurisdiction over the matter as the exchange is regulated by the FMC, which comes under the ambit of the consumer affairs ministry. 

The idea of merging FMC into Sebi has been discussed earlier as well, but it has not progressed because of differences between parent ministries. 

In 2009, the finance ministry had even prepared a note on the modalities but the proposal was shelved after it ran into opposition from the FMC and its administrative ministry. 

In October last year, Justice B N Srikrishna-headed Financial Sector Legislative Reforms Commission had recommended that a super regulator should subsume Sebi, IRDA, PFRDA and Forward Markets Commission (FMC). The finance ministry has already accepted the recommendations and is now working out a plan on how the report can be implemented. 

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