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FMC's new chief Ramesh Abhishek has an uphill task ahead

Ramesh Abhishek, the recently-appointed chairman of Forward Markets Commission (FMC), has the tough task of heading a regulatory body that has been attempting for years to emerge as an empowered agency with oversight powers like its capital markets counterpart Sebi. The FMC stands out among other regulators because it reports to a department within the government - the department of consumer affairs in line with the Forward Contracts Regulation Act, 1952. And, unlike Sebi, which regulates stock exchanges, the FMC lacks search and seizure powers to combat illegal or dabba trading and can't collect fees and penalties from brokers and recognise or derecognise bourses. A bill seeking to provide autonomy to FMC has been lying with the department-related standing committee for the past nine months and may not see the light of day anytime soon as the consumer affairs minister's priority lies with pushing through the food security bill. Against such a backdrop, Abhishek's greatest challenge lies in cracking down on illegal or dabba trading in commodities. The scale of dabba trading in commodities remains uncertain. But it is expected to be in multiples of the over 100 lakh-crore turnover clocked by bourses like the Financial Technologies-promoted MCX and NSE-co-promoted NCDEX during a year. "A great part of Abhishek's time will have to be spent devising ways and means of containing illegal trading," says a former FMC official, who was involved in the very same task before commodity futures trading was reintroduced after a 30-year ban in 200203. Abhishek's earlier stint as joint secretary in the home ministry, where he handled the E-courts project to speed up the justice process, will come in handy as, among other things, he is well versed-with the law. Like what FMC undertook in the past, he is gearing up to train the police in the nitty-gritty of commodity futures trading to help them tackle dabba in an effective manner. "Even if he hits at centres like Gujarat, Rajasthan and Kolkata, where dabba is believed to be rife, it will help control the menace," said a market intermediary. Apart from depriving exchanges of legitimate income, since their prices are used as benchmarks to settle dabba trades, the government loses out on tax. "Abhishek is known to be an intelligent officer but it remains to be seen whether he can succeed where his predecessor, despite his best efforts and domain knowledge, failed, in getting the FCRA Bill passed," noted a government official. Abhishek is currently a joint secretary, holding additional charge as FMC chairman, whose post is of additional secretary rank. Abhishek has around a year and seven months' residual term of a five-year tenure with the central government as a joint secretary. In the past, he held the prestigious post of district magistrate of Bihar capital Patna. He is a Mason Fellow and has a Master's Degree in Public Administration from Harvard Kennedy School and a Master's Degree in Politics from the Jawaharlal Nehru University, New Delhi.

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