BSE shelves plans for commodity bourse

Seeks Sebi's nod to start separate segment on its platform for trading in commodities

Stock exchange BSE has dropped its plan to set up a separate commodity bourse and instead has sought regulator Sebi's approval to start a separate segment on its platform for trading in commodities.

BSE had planned to start its own commodity exchange by next fiscal year and had received Sebi's nod for the same while it was awaiting approval from erstwhile commodities regulator Forward Markets Commission (FMC).

However, following the merger of FMC with Securities and Exchange Board of India (Sebi), BSE decided to begin a separate segment for commodities trading and last week moved capital market regulator to seek approval for a commodity trading segment.

"Sebi has not given its approval to stock exchanges to trade in commodities yet. But we are keen to launch the segment for commodities," BSE Managing Director and CEO Ashishkumar Chauhan told PTI.

"Rather than setting up a separate exchange, we have now decided to have separate segment," Chauhan said.

"We had applied for commodity exchange but then the merger happened and so last week we applied for approval from Sebi for the segment of commodities on the BSE," he added.

According to Chauhan, separate commodity segment would ensure that "all the members of the BSE become automatically eligible to trade in commodities if they fulfil the laid out criteria".

In the first ever merger of two regulators, FMC was merged with Sebi on September 28 to help streamline the regulations and curb wild speculations in commodities market, while facilitating further growth of the market.

As its regulatory ambit widened with FMC's merger, Sebi plans to put in place a new mechanism for entities desiring to operate in both equities and commodities segments.

While necessary regulations have been notified to bring into effect the merger, Sebi has also created a separate commodity cell and has set up new departments for regulation of commodities derivatives market.

BSE, Asia's oldest stock exchange, provides trading in equity, debt instruments, equity derivatives, currency derivatives, interest rate futures, mutual funds and stock lending and borrowing.

It is the largest exchange in the world in terms of number of listed companies.