Date:11/01/2007 URL: http://www.thehindu.com/2007/01/11/stories/2007011108221700.htm

Business

`FMC intervention crucial to counter manipulation'

Special Correspondent

New Bill will make FMC autonomous

MUMBAI: The Forward Markets Commission (FMC) on Wednesday reiterated that the Commission had to intervene in the market to counter manipulations in price discovery, which would result in escalation of prices of essential commodities.

There have been increases in the prices of certain commodities recently and the futures market was blamed for the increase. "The higher prices at the futures market resulted in a higher realisation by the farmer. However, the fact that higher prices affect the consumers cannot be wished away and the Commission had to artificially intervene in the market,'' S. Sundareshan, Chiarman, FMC, said at the sixth national conference of the commodity exchanges.

Referring to the proposed amendments to the Forward Contracts (Regulation) Act, 1952, the Chairman observed that the purpose of the amendment was to strengthen the regulation and not merely to liberalise the markets.

Even after the passage of Bill, the power to restrict futures trading in certain commodities whould remain with the Government.

While inaugurating the conference, Yashwant Bhave, Secretray, Department of Consumer Affairs, noted that the passing of the proposed Bill would make the FMC autonomous and capable of regulating the market more effectively.