Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Market / Stock-market-news/  BSE, NSE get Sebi nod to launch commodity derivatives segment
BackBack

BSE, NSE get Sebi nod to launch commodity derivatives segment

BSE said it will it begin trading in commodity derivatives with non-agriculture commodities like metals, to be followed by agricultural commodities later. NSE too will start off with non-agri commodities

NSE and BSE have received permission from Sebi for commodity derivatives trading. Photo: Abhijit Bhatlekar/MintPremium
NSE and BSE have received permission from Sebi for commodity derivatives trading. Photo: Abhijit Bhatlekar/Mint

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

The two exchanges have received permission from the Securities and Exchange Board of India (Sebi) for commodity derivatives trading.

In a statement, BSE said it will begin trading in commodity derivatives with non-agriculture commodities like metals, to be followed by agricultural commodities later. NSE too will start off with non-agri commodities.

“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 conducted multiple road shows and engaged leading industry associations to create awareness among the participants and held mock trading sessions with active participation from prospective participants.

Earlier in 28 December 2017, the market regulator had said the country would have a unified exchange regime wherein stock exchanges would be allowed to offer trading in 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.

Currently, commodity derivatives are largely traded on MCX and NCDEX.

Meanwhile, Sebi, in its board meeting, on Monday, approved regulatory framework for permitting foreign entities having actual exposure to Indian commodity markets to participate in the domestic commodity derivatives 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 1 lakh per exchange would be levied on turnover arising from agricultural commodity derivatives.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 20 Sep 2018, 11:25 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App