What was urgency to promulgate a Forward Contracts (Regulation) Amendment) Ordinance, 2008?
In view of the change in the approach of the Government towards forward trading in commodities from `prohibition` to `regulation`, and the rapid acceleration of growth in the commodity futures market, there was an imperative and urgent need to upgrade legal and regulatory system. The regulatory provisions of the Forward Contracts (Regulation) Act, 1952 have not changed significantly ever since it was enacted in 1952. It was apprehended that any major crisis in this market may not only be a setback to further development of commodity futures trading, but would dissuade participants in the real sector, particularly those in the agricultural and agro-based sectors, from availing this price-risk management instrument. As the Government is withdrawing from administrative price mechanism and direct market-intervention, the participants in the real sector would be exposed to the price-volatility caused by market forces, both domestic and global. The representations received from several stake
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