Commodity future trade at 18 lakh cr

New Delhi, Oct 13 (UNI) The Government will soon be bringing out a legislation to strengthen the Forward Markets Commission (FMC), helping the regulator to improve its monitoring of the commodity futures market, which has grown by 400 per cent last year.

Total value of commodity futures trade stood at 21 lakh crores during last year and 18 lakh crores in the first half of the current fiscal.

The amendment in the Forward Contract (Regulation) Amendment Bill, 2006 will make FMC appear as powerful as Securities and Exchange Board of India (SEBI). This will pave way for option trading after taking precautionary measures, Secretary Department of Consumer Affairs L Mansingh told reporters here.

''We are passing through a crucial phase in the development of the futures market and effective regualtory steps are neccessary to upgrade the market system,'' he added.

Chairman of Forward Markets Commission S Sundareshan said that mutual funds and foreign institutional investors (FIIs) may be now be permitted in the market.

He further said the amended law will have a space for requirement for margins while there will be possible limits for commodity too. In addition, there would also be limits for daily price fluctuations.

In addition, work is on with Nafed to interlink 7,500 mandis all over the country to benefit the farmers.

Moreover, the government is also working on Warehouse development and regulation bill and to amend the Consumer Protection Act.

A working group has also been set up to have regulation in the retail sector, Mr Sundareshan added.

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