Colombo Stock Exchange to get NCDEX help in commodity derivatives trading

India’s leading agriculture commodity exchange, the National Commodity and Derivatives Exchange (NCDEX), on Thursday signed a memorandum of understanding (MoU) with the Colombo Stock Exchange (CSE), for setting up a comprehensive framework for commodities and derivatives trading.

 

The agreement will enable knowledge transfer between the two exchanges where they will share expertise in product designing and development, trading systems and regulatory framework, sources said.

 

It will also involve assistance for setting up advanced trading and operational systems, capacity building by conducting training programmes and infrastructure development, they said.

 

The understanding will also enable the development of a broad-level regulatory framework to ensure smooth functioning of derivatives trading.

 

Sources said a formal agreement between the two exchanges was signed in the presence of NCDEX CEO Arun Raste and CSE Chairman Dilshan Wirasekara.

 

Wirasekara said the agreement will enable Sri Lanka’s journey towards diversifying its capital market offerings.

 

Raste noted that the exchange’s expertise in derivatives and commodities trading developed under the unwavering support of the Indian government enables it to share valuable insights internationally.

 

NCDEX, India’s leading commodities exchange was incorporated on April 23, 2003 as a public limited company, and commenced operations on December 15, 2003, as a recognised association under the Forward Contracts (Regulation) Act, 1952.

 

From September 2015, the exchange became a recognised stock exchange under the Securities Contracts (Regulation) Act of 1956 under the regulation of the Securities Exchange Board of India.

 

It saw a dip in fortunes after the central government suspended derivatives trading of paddy (non-basmati), wheat, chana, mustard seed and its derivatives, soybean and its derivatives, crude palm oil and moong.

 

According to reports, the suspended commodities contributed almost 70 per cent to the exchange’s volumes. The suspension has since not been lifted till date, despite studies showing that they have been counter-effective.