FMC Chairman B C Khatua may get an extension

The government may give Forward Markets Commission (FMC) chairman B C Khatua another extension, albeit for a short period. 

A month before, the consumer affairs ministry had written to the department of personnel and training (DOPT) to form a panel for selecting a chairman. But the ministry has not received any communication, pending which it proposes to give an extension to Khatua. The extension would be for a short period, till DOPT forms a panel and gets it approved. 

Khatua, instrumental in many market-related changes in the commodities segment and working of the Forward Contracts Regulation Act (Amendment) Bill, was given a year’s extension in August 2010. Currently, the Bill is being vetted by a parliamentary standing committee. 

The Bill is important for the development of the forward market, since FMC as a regulator would get autonomy and power to regulate the market effectively. New products like options would be allowed in the commodity market. This would benefit various stakeholders, including farmers, to take benefit of price discovery and price risk management. 

The amendments proposed in the Forward Contracts (Regulation) Act, 1952, are: updating existing definitions and inserting new definitions; changes in provisions of composition and functioning of FMC; enhancement of FMC powers; corporatisation and demutualisation of existing commodity exchanges and setting up of a separate clearing corporation; registration of intermediaries; enhancing penal provisions; permitting trading in options in goods or commodity derivatives; and making provision for designating the Securities Appellate Tribunal as the appellate tribunal for purposes of the Act, including that of levying fee.