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ICEX, IOSDA ink pact for iron ore futures

ICEX, IOSDA ink pact for iron ore futures
PTI
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First Published: Mon, Nov 08 2010. 02 05 PM IST
Updated: Mon, Nov 08 2010. 02 05 PM IST
Mumbai: Indian Commodity Exchange Ltd (ICEX), on Monday said it has signed a Memorandum of Understanding (MoU) with the Singapore-based globally reputed organisation Iron Ore and Steel Derivatives Association (IOSDA), for the growth and development of iron ore and steel derivatives.
ICEX and IOSDA will jointly work towards spreading the awareness iron ore as a mineral and its related futures trading activity, among various stakeholders and all such connected participants of the ecosystem, ICEX said in a statement here.
“Both the organisations have made significant progress within their own areas for the growth and development of the iron ore futures (IOF) market and are now willing to enter into a MoU to mutually share their knowledge and expertise for the further development and advantage of the industry,” ICEX’s director, Ashwani Sondhi, said.
It is interesting to note that ICEX has already initiated the process of regulatory approval to launch the IOF contract for the first time in the country. It will be the world’s first IOF contract whereby miners, processors, traders and importers can participate in the futures markets.
“The mineral industry is well established in the country and there is a need for establishing risk management tools for the industry for which our exchange has made the pioneering steps,” Sondhi said.
”The revolution in the iron ore pricing system has opened the door for the use of financial tools which can better manage price risk. Interest in and the use of these tools are growing as buyers and sellers come to understand their potential,“ IOSDA’s secretary, Pedro Coatait, said.
Singapore-based IOSDA is an independent organisation for producers, brokers bankers, exchanges and clearers and act in the best interests of its members for the benefit of the market place in which its members transact in the iron ore and related derivatives markets world-wide.
It may be recalled that besides the current pact, ICEX had also joined hands with the Federation of Indian Mineral Industries (FIMI), New Delhi, in September this year for promoting the development of an efficient IOF market in the country.
Under the pact, both will share knowledge and expertise in this regard, besides establishing risk management tools for the industry, the release said.
ICEX, a screen-based on-line derivatives exchange for commodities, is in the process of putting in place robust assaying and warehousing facilities in order to facilitate deliveries. It is jointly promoted by Indiabulls Financial Services and MMTC Limited and has Indian Potash Ltd, KRIBHCO and IDFC, among others, as its partners.
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First Published: Mon, Nov 08 2010. 02 05 PM IST
More Topics: ICEX | IOSDA | Iron ore futures | IOF | Derivatives |