BSE waives transaction charges for commodity derivatives, launch on Monday

NSE to launch trading on Oct 12, will introduce mini-gold contracts of 100 grams to attract small investor

The Bombay Stock Exchange (BSE) is launching trading in commodity derivatives on October 1 and has decided to waive transaction charges for the first year on commodities market operations, the exchange said on Friday.

The National Stock Exchange (NSE), the largest exchange by volume, said it will be launching trading on October 12, that is after pitru paksha (considered inauspicious period). NSE will begin with gold, silver and will even introduce mini-gold contracts in order to attract small investors.

The exchange will begin trading in commodity derivatives with gold (1 kg) and silver (30 kg), along with silver contracts. It will later add energy products, followed by agri commodities.
 

In what is seen as a big challenge to MCX, a market leader in non-agri commodities derivatives, BSE has decided to waive the transaction charges for the first year of commodities market operations.

"BSE firmly believes that its commodity derivatives platform will help foster efficient price discovery, reduce timelines, introduce a cost-effective, user-friendly, robust risk management system and widen market penetration," the BSE statement said.

The launch will be marked by way of a bell-ringing ceremony on October 1, it said.

"We believe BSE's foray into commodities derivatives on October 1 will enable many more participants to join the commodity market and enhance linkages between underlying spot markets and commodity derivatives markets in each product BSE introduces in this market," said Ashishkumar Chauhan, MD and CEO, BSE.  

NSE said in a statement it has received approval for launch of the Commodity Derivative Segment from Sebi on September 21. Apart from gold and silver, it will be launching mini-gold (100 gram) contracts. The NSE spokesperson said, “We have received representations from several trading/clearing members suggesting that some more time be given to market intermediaries to put in place appropriate systems at their end for effective trading.” Suggestions were also received not to launch trading during pitru paksha, the spokesperson added.