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SEBI gives BSE, NSE approval to launch Commodity Derivatives Segment


India’s top two bourses Bombay Stock Exchange and National Stock Exchange of India Ltd on Wednesday said they will launch commodity derivatives trading from 1 October.

Both the exchanges NSE and BSE have gotten authorization from the Securities and Exchange Board of India (Sebi) for commodity derivatives trading.

In an announcement, BSE said it will start trading in commodity derivatives with non-agricultural products like metals, to be followed by agricultural commodities soon. NSE too will begin off with non-agri products.

“NSE will launch its commodity derivatives segment on October 1, 2018. NSE has plans to launch derivatives trading in non-agriculture commodities in the initial phase, followed by agriculture commodities, subject to SEBI approval. This would achieve integration of trading in commodity derivatives market with other segments of the securities market at exchange level,” an NSE statement said.

NSE said it has directed numerous roadshows and drew in driving industry association to make awareness and marketing among the members and held mock trading sessions with active participation from prospective participants.

Prior in 28 December 2017, the market controller SEBI had said the nation would have a unified exchange regime wherein stock exchanges would be permitted to offer commodities derivatives from October this year.

Kishore Narne, head – commodity & currency, Motilal Oswal Securities said the move will not have an immediate impact on the commodity market segment. “We do not believe that it would create additional liquidity or result in more volume in the commodity markets. It has been to seen how the two exchanges roll out the products and implement them to have an impact on the commodity markets,” he said.

As of now, ware subsidiaries are generally exchanged on MCX and NCDEX.

In the interim, Sebi, in its executive gathering, on Monday, affirmed administrative system for allowing outside elements having real presentation to Indian ware markets to partake in the local product subsidiaries markets.

Sebi said that the regulator, government and stock exchanges are taking various steps to promote the agricultural commodity derivative segment so that the benefits of agricultural commodity derivative are passed on to the farmers and Farmers Producer Organizations (FPOs). The Sebi board decided that instead of levying regulatory fee at the prescribed turnover-based slab rates, a nominal regulatory fee at a flat rate of Rs 1 lakh per exchange would be levied on turnover arising from agricultural commodity derivatives.

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