NSE, BSE plan commodity derivatives platforms

Mumbai : India’s leading stock exchanges National Stock Exchange and Bombay Stock Exchange plan to enter the commodity derivatives market.

Last week, BSE applied to the Securities and Exchange Board of India for licence to launch a commodity derivatives platform. NSE applied a fortnight ago. The move to launch their commodity trading platforms comes in the wake of the capital market regulator allowing integration of stocks and commodities trading on a single exchange from October this year.

“Sebi will see their preparedness to start trading in commodities before giving them an inprinciple approval,” said a person familiar with the development.

Email queries sent to BSE and NSE went unanswered till the time of going to print.

NSE bSE SNIP

Exchanges have been allowed to provide universal trading facilities — trading platforms for both stocks and commodities.

At present, commodity derivatives are traded on separate exchanges — MCX and NCDEX.

Sebi has been regulating the commodities derivatives market after its merger with the Forwards Markets Commission.

In last year’s budget (2017-18), finance minister Arun Jaitley had proposed integration of the commodities and securities market.

Sebi decided to implement this proposal in two phases. In the first phase, it allowed integration at the intermediary level.

The second phase involves allowing a single exchange to operate various segments such as equity, equity derivatives, commodity derivatives, currency and interest rate futures.

In December, Sebi chairman Ajay Tyagi, after a board meeting, said: “As you are aware, when FMC was merged with Sebi in September 2015, there were different timelines for different items.Going by these timelines we could see that October 2018 perhaps is the right time where it would be three years after Sebi-FMC merger that all exchanges are able to deal with commodities or securities.”