Uti Sec To Aid Pepper Bourse Capitalisation Plan

One of the last obstacles in the commencement of trading on the International Pepper Exchange at Kochi is being ironed out. The UTI Securities Exchange, through the independent project advisor G Ramchandran, has embarked on a project to facilitate the capitalisation of the bourse's clearing corporation.

Launch of trading on the international exchange is pending issuance of the RBI notification to permit commercial scheduled banks and financial institutions to pick up equity stake in the clearing corporation.

The independent on-line clearing corporation (first commodities clearing corporation of the country) has not yet attracted banks/institutions, and this has compelled the UTI Securities to assist in the capitalisation plan. The trust will not charge any fees for service.

 

The RBI notification is crucial since 45 per cent of the proposed paid up capital has been reserved for institutional clearing members. The equity capital of the corporation has been fixed at Rs 5 crore, while the authorised capital is around Rs 10 crore.

UTI Securities Exchange has already commenced its marketing exercises.

It has made presentations to various banks and institutions on the finer details of the global pepper futures exchange and the clearing corporation. UTI is likely to make presentations to at least 8-10 banks and financial institutions within the next two weeks.

According to sources, the presentations with banks will be part of the first phase of the marketing exercise. As part of the second phase, the institutions will hold a meeting in Kochi to demonstrate the existing infrastructure facilities.

Mock trading sessions on the international pepper futures contract will also be carried out at that stage, exchange officials said.

According to V K Agrawal, the Forward Markets Commission (FMC) chairman, which is the regulatory body for commodity exchanges, responses from banks and financial institutions are awaited. While the basic interest exists, the reply has not been as expected since institutions have preferred to wait until the project takes off,