Govt to allow MFs, FIIs in commodity futures

New Delhi, June 8 (UNI) With the Forward Market Commission (FMC) giving its strong support to the proposal, the government will soon allow FIIs, Mutual Funds (MFs) and banks to participate in the commodity future markets, FMC Chairman S Sundareshan said today.

The chairman was speaking on the 2nd Annual Conference on 'Commodities Opportunities in Booming Commodities Market' organised by Associated Chamber of Commerce and Industry (ASSOCHAM).

''The government has agreed to permit FIIs, banks and mutual funds to trade in crude and bullion market following strong recommendation from FMC. We have already received feedback from the government regarding this and a formal decision is expected soon,'' he said. He said no one is against speculation, but warned that manipulators won't be spared.

The FMC as a regulator has been putting in all possible efforts to ensure that the commodities futures market grow in a rational manner with larger participation of farmers across the country without having any room for manipulation, he added.

He said the criticism that FMC has not been able to regulate the commodities exchanges spread in different parts of the country in an effective manner is false and said the regulator has complete control over the commodities exchanges.

He also added that FMC cannot be blamed for farmers committing suicide.

The FMC chief said the trade in the futures commodities market for the year has exceeded Rs 21 lakh crore in 2005-06 and 2006-07 is the year of consolidation and opined that transaction charges of commodities should not vary from one exchange to another and should be uniform.

The chairman also urged for a need to have an efficient nation-wide price discovery mechanism in the Commodities market.

He also said the country is very close in acheiving its goal of becoming the price setter.

UNI MP PC BD1554