SAT to decide on commodity cases

14 June 2007

Mumbai: The Securities Appellate Tribunal will decide cases relating to commodity exchanges once the Parliament passes amendments to the Forward Contracts (Regulation) Act. "The amendment is ready and it is a matter of time before it gets clearance by Parliament," a government official said.

The consumer affairs ministry has proposed major changes in the FCRA, including giving powers to SAT for commodity related issues and officials expect the bill to be passed in the monsoon session of Parliament.

"Although it was earlier decided to set up a separate tribunal for the commodity market, it has now been decided to appoint SAT as the authority to hear appeal against decisions of the Forward Markets Commission," a government official said.

The proposed amendment gives commodity market regulator FMC powers to frame its own regulations without seeking approval of the consumer affairs ministry as suggested by the parliamentary standing committee, the official said.

FMC has already started registration of intermediaries in the futures market, which is an administrative decision of the regulator. The intermediaries will get statutory powers after the bill is passed, the official said.

The FCRA amendment also proposes to raise the penalty power with FMC from the current Rs1,000 to a minimum of Rs25,000 and a maximum of Rs25,00,000, the official said., adding, FMC has the discretion to impose an even higher fine if the offence is more in terms of value.