role of forward market commission

By Group 3Akshay Modi Harish KumarJain Sunny VinodSandeep GVivek Surana

Role

of

Forward Markets Commission

Overview What is Forward Markets Commission (FMC)

• FMC’s activities breakdown

Functions of the FMC

Powers of the Commission

Benefits of Futures Trading

Regulatory measures prescribed by the FMC

Legal and regulatory provisions for customer protection

FMC’s role in curbing illegal forward trading

Conclusion

Forward Markets Commission (FMC)

Regulating & Promoting Futures/ Forward trade in commodities

Headquartered at Mumbai, established in 1953 under FCRA 1952

Overseen by the Ministry of Consumer Affairs, Food and Public Distribution, Govt. of India.

As of March 2009, it regulates Rs 52 Trillion worth of commodity trade in India. Source: Forward Markets Commission website

FMC’s activities breakdown Market Division

Monitoring & Surveillance Division

Registration Division

Legal Affairs Division

Administration Division

Functions of the FMC Government advisory

Watch dog

Periodical report submission

Inspection

Recommendations

Source: Forward Markets Commission website

Powers of the Commission As indicated under Section 4 A of the F.C.(R) Act, 1952

Summoning and enforcing the attendance of any person and examining him on oath.

Requiring the discovery and production of any document.

Receiving evidence on affidavits.

Requisitioning any public record or copy thereof from any office.

As indicated under Section 12 B of the F.C.(R) Act, 1952

Suspend governing body of recognized association.

Suspend business of recognized association.

Approval of amendment to the rules of the recognized associations.

Direct rules to be made or amended.

Issue of directions to the recognized associations

Continued ..


Benefits of the Futures Trading Price stabilization

Leads to integrated price structure throughout the country.

Facilitates lengthy and complex production and manufacturing activities.

Balance the supply and demand

Encourages competition

Acts as a price barometer to farmers and other trade functionaries.Source: Forward Markets Commission website

Regulatory measures prescribed by the FMC

Limit on net open position of an individual operator and at Member level to prevent excessive speculation.

Circuit-filters

Imposition of margins

Penalty for defaults / delivery obligations.

Daily Mark to Marketing of the contracts.

Legal and regulatory provisions for customer protection Exchanges to switch over to electronic trading, clearing

and settlement.

The Commission mandates all Exchanges to display: Name Address Telephone number of the commissioner for any grievances


Continued ..

The website of the Commission has a provision for the customers to make:

Complaints Send comments Suggestions


FMC’s role in curbing illegal forward trading Communication of information relating to offences under the

Act to the police authorities.

Scrutinize documents

Render expert advise.

Conducts training progammes, Seminars, Workshops for the benefit of Police Officers/ Prosecutors and Judicial Magistrates.

Exhorts the office bearers and the members of the recognized exchanges to share information in respect of illegal forward trading.Source: Forward Markets Commission website

Conclusion Currently, the FMC allows commodity trading

in 22 exchanges in India, of which 3 are national namely MCX, NCDEX, NMCE.


Thank You ..

role of forward market commission

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