Universal exchanges: Welcomed by brokers, but fraught with challenges

Sebi's move to merge equity and commodity trading businesses has been broadly welcomed by brokers but pose challenges for the bourses themselves

Come October 1 and a significant policy change could alter the landscape of India's exchange industry. From that date, market regulator the Securities and Exchange Board of India (Sebi) has allowed commodity exchanges to enter equity and currencies trading and equity exchanges to offer commodity derivatives.

This crossover will inject a whole new level of competition, potentially benefiting customers, with technology, speed of trade, number of participants and, most importantly, pricing and arbitrage determining the winners. 

But this poses challenges for the exchanges too. Apart from attracting liquidity, exchanges will have to contend with predatory pricing from competitors, attracting talent