2010 General Studies, all questions

UPSC Prelims 2010 · General Studies

Question 135: Economy and Social Development

In India, which of the following is regulated by the Forward Markets Commission ?

aCurrency Futures Trading
bCommodities Futures Trading
cEquity Futures Trading
dBoth Commodities Futures and Financial Futures Trading

AnswerThe answer is (b).

The Forward Markets Commission, set up under the Forward Contracts (Regulation) Act, 1952, regulated forward and futures trading in commodities such as agricultural goods, metals and energy. Currency and equity futures were regulated by the RBI and SEBI, so the FMC did not cover them or the financial futures mentioned in (a), (c) and (d). Remember: FMC meant commodity futures; SEBI, equity; RBI, currency.

Why each option is right or wrong
  • (a) Currency futures came under the RBI and SEBI.
  • (b) Right: the FMC regulated commodity futures trading.
  • (c) Equity futures came under SEBI.
  • (d) Financial futures were outside the FMC's remit.

Worth knowing: The FMC was merged into SEBI in September 2015, and SEBI now regulates commodity futures too.

Explanation: written by UPSC Grade, not by UPSC.

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Source: UPSC, Civil Services (Preliminary) Examination 2010, General Studies, Series A. The paper on upsc.gov.in.