Union Government notifies merger of FMC with SEBI
- The government has notified the merger of commodities regulator Forward Market Commission with the Securities and Exchange Board of India (SEBI).
- It will be effect from 28 September 2015.
- As a result, of this notification FCRA,1952 will get repealed and regulation of commodity derivatives market will shift to SEBI under Securities Contracts Regulation Act (SCRA) 1956 with effect from 28th September, 2015
- A unified regulator for commodities and capital markets will help streamline monitoring of commodity futures trading and curb wild speculations.
- The Financial Sector Legislative Reforms Commission (FSLRC) had recommended that Sebi, IRDA, PFRDA and FMC should be merged into a single entity into a unified financial agency (UFA).
What is Forward Markets Commission (FMC) ?
- The Forward Markets Commission (FMC) is the chief regulator of commodity futures markets in India.
- As of July 2014, it regulated Rs 17 trillion worth of commodity trades in India
- It is headquartered in Mumbai and this financial regulatory agency is overseen by the Ministry of Finance.
- The Commission allows commodity trading in 22 exchanges in India, of which 6 are national
- In the wake of a Rs 5,500-crore payment crisis at the National Spot Exchange Ltd, FMC was brought under Finance Ministry in 2013.
- In the beginning, FMC was only regulating regional commodity exchanges and its role was expanded after the emergence of national electronic trading platform in early 2000.