BSE plans trading in commodity derivatives

Approaches Sebi for approval

Leading bourse BSE on Saturday said it planned to launch a commodity derivative segment which would allow trading in metals, and had approached the market regulator Securities and Exchange Board of India (Sebi) for approval.

“BSE plans to set up a commodity derivative segment as soon as approvals are in place. It would consist of non-agricultural commodities like metal, oil and gas,” Managing Director and CEO Ashish Kumar Chauhan said. He said that after the merger of Sebi and commodity market watchdog Forward Market Commission (FMC), the exchange members were not required to create a separate subsidiary to start commodity trading.

“As and when that (merger) process is complete, our members can trade in commodities. Earlier, you had to open a separate subsidiary to become member of commodity exchange. Now, they are allowing us to trade as part of BSE as and when the approvals come,” Chauhan said.

At present, there are two major national and six regional bourses which offers commodity futures trading in the country.

As BSE completes 140 years of operations, Chauhan said he wants to position itself as “investment bourse” of any type of asset class rather than just be confined to being an equity trading platform.

He further said that BSE has got board approval for setting up of an international exchange in Gujarat's GIFT City.

"We will apply to regulator Sebi. This is first time that an international finance zone is set up and we plan to offer all asset classes which will include equity derivative, currency derivate, interest rate derivative, and international and domestic commodities in the international exchange," he said.

The new exchange will also help global companies raise finance from other overseas investors.

"We want to raise funds for Indian companies and foreign companies using international finance zone. For international finance zone to succeed and compete with Singapore, Hong Kong and others we need to ensure that it is able to provide all options under one roof," Chauhan said.

He said the planned international exchange would be a BSE subsidiary through which companies can raise funds through issue of depository receipts.

"Currently, we are in the process of discussion with MCA and others what names are available," Chauhan said when asked what would be the name of the new exchange in the GIFT City.

GIFT city, situated in Gujarat, caters to India's large financial services potential by offering global firms a world-class infrastructure and facilities. It aims to attract the top talent in the country by providing the finest quality of life all with integrated townships, IFSC and multi-speciality special economic zone (SEZ).