Futures trading on power firms is likely to be further delayed. The Bombay high court on Monday ruled that neither the Central Electricity Regulatory Commission (CERC) nor the Forward Markets Commission (FMC) has exclusive jurisdiction to deal in futures contract in electricity.
A division bench of justice PB Majmudar and justice AV Mohta said that though a forward contract in any notified commodity could only be done under the FMC, considering the special nature of the commodity and the regulation of prices, it cannot exclusively deal in power futures contract.
“Similarly, the CERC has no jurisdiction to frame any regulation in connection with the futures contract in electricity,” the bench added, while holding the CERC (Power Markets) Regulations 2010, would not be operational until the central government issues a specific legislation.
After the FMC allowed Multi Commodity Exchange (MCX) to commence futures contracts in electricity, the CERC had framed regulations in September 2010.
Thereafter, both the regulatory authorities had locked horns claiming exclusive jurisdiction to deal with power futures trading.
Meanwhile, the central government has directed both regulatory authorities to maintain status quo, which is likely to continue until it issues a specific legislation, as suggested by the high court.