The launch of commodity derivatives platform on BSE will help efficient price discovery, reduce timelines and make it cost effective.
Mumbai: Leading bourse BSE on Monday became the first stock exchange in the country to launch the commodity derivative contracts in gold and silver. Till date, commodity contracts are available only on MCX and NCDEX, the two specialised commodity derivatives exchanges in the country.
"We have launched gold and silver derivative contracts and have applied for launching of crude oil and copper contracts with Sebi. We will subsequently launch more agri commodities," BSE managing director and chief executive officer Ashishkumar Chauhan told reporters.
He said the launch of commodity derivatives platform on BSE will help efficient price discovery, reduce timelines and make it cost effective.
"The bourse also promises a user-friendly platform with robust risk management system and wider market penetration," said Chauhan. Speaking after the bell ringing ceremony, Sebi's whole time member, S K Mohanty, said, "We have put all rules and regulations and every exchange is equal to us and no exchange will have any distinctive or differential treatment from the regulator.
Today onwards, all exchanges will be known as stock exchange and there will be no commodity exchanges." Mohanty called for the launch of more deliverable contracts in agri-commodities, which can provide good price discovery platform and help farmers and agri producing organisations, who can participate and take the benefit of price discovery and price risk management.
He said despite the presence of about 40-plus contracts, country's commodities derivatives segment is still at a very nascent stage. Out of the total exchange-traded derivatives across the globe, the size of commodity derivatives is only 22 per cent, out of which India has a negligible share of 5-6 per cent, according to Mohanty.
The country is a leading producer of several commodities and the world's second largest consumer of gold, but it depends on benchmark prices from abroad, he added. BSE has already registered 150 trading members and 27 clearing members for its commodity derivatives segment.
The exchange also waived off transaction charges for the first year in the commodities derivatives segment. The commodity trading will be conducted from 10.00 am to 11.30 pm from Monday to Friday.