It has proposed to introduce an amendment bill in the next session of Parliament. The amendments also strengthen the Forward Markets Commission (FMC) as per recommendations of the Kabra Committee and facilitate setting up of regional offices at Ahmedabad, Agra, Hapur and Chennai.

The amendments to the Act also suggested definition of futures trading and increase the period of delivery of goods and payment under ready delivery contracts from the existing 11 days to 30 days.

The amendment also proposes definition of specific delivery contracts and non-transferable specific delivery contracts to make delivery of goods compulsory and to make performance of such contracts by any means other than delivery punishable.

The quantum of fine has been raised from Rs 1,000 to Rs 5,000. The amendment also recognises dealings through brokers in addition to the members of the commodity exchanges. In this context, it has defined the scope of the broker and has made substantive provision for recognising only registered brokers as persons eligible to trade in commodity exchanges in addition to the members of the exchange.

In pursuance of the recommendations of the high-powered Kabra Committee for strengthening of the Forward Markets Commission (FMC), the amendments suggested upgradation of the post of chairman of FMC from the present level of joint secretary to the level of additional secretary in the government. The FMC members have also been upgraded from the present level of director to that of joint secretary in the government. The maximum number of members in the FMC has been increased from four to seven.

The government's decision to amend the Act is in consonance of its policy of liberalising the commodity sector in the country and providing an adequate and efficient mechanism for futures trading.

Already the international futures trading exchange for pepper at Kochi has been functioning successfully. This has encouraged the government to set up another international futures trading exchange, which will be for castor oil in Mumbai. This centre will start functioning by the end of this year after the bye-laws for the exchange and clearing house are finalised.

In March this year, the government had permitted domestic futures trading in jute goods in Calcutta. Domestic futures in cotton is slated to flag off in Mumbai next month.

At present domestic futures are allowed in gur, hessian, potato, pepper, turmeric and castor seeds.