Consumer Affairs Min agrees to the proposal of FMC coming under FinMin

Presently Consumer Affairs Ministry oversees the functioning of FMC

Commodity markets regulator FMC may soon come under the purview of the Finance Ministry as the Consumer Affairs Ministry has agreed to the proposal in the wake of deepening payment crisis at NSEL, sources said today.

At present, the Consumer Affairs Ministry oversees the functioning of the Forward Markets Commission (FMC), which regulates futures trading on 21 commodity bourses, including MCX and NCDEX.

FMC has recently been empowered to look into NSEL issue.

"The Consumer Affairs Ministry has accepted the Finance Ministry's proposal on shifting FMC from its ambit," a highly placed source said.

FMC is likely to be brought under the Finance Ministry effective from next month. After the consent from the President, the Cabinet Secretary will issue a notification in this regard soon, the source noted.

As per the existing rule, President of India, upon the advice of the Prime Minister, can allocate the business of a particular Department to another ministry for smooth functioning.

Sources said Prime Minister Manmohan Singh and Finance Minister P Chidambaram had an informal discussion on this matter.

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.

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 5,400 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. NSEL has also sacked its Managing Director and CEO Anjani Sinha and six other top executives.