New Delhi: Leading bourse National Stock Exchange (NSE) has sought capital markets regulator Sebi’s approval for launching a commodity futures trading segment. The exchange has written a letter to the Securities and Exchange Board of India (Sebi) in this regard.
“We are exploring the possibilities in commodities derivative segment. Recently, we have written to Sebi. We expect to hear from them soon about broader framework among other things,” a NSE spokesperson said.
In commodity market, only futures trading is allowed currently, while products like index, options are not permitted and restrictions exist with regard to participant as well. At present, there are two major national level and six regional bourses for commodity futures in the country.
NSE’s rival BSE has also applied for Sebi approval to launch a commodity segment on its platform.
BSE and NSE currently provide trading in equity, debt instruments, equity derivatives, currency derivatives, interest rate futures, mutual funds and stock lending and borrowing among others.
If exchanges are permitted in the segment, it will bring down cost and time as the bourses already have the necessary technology platform and risk management framework in place.
Having a commodity platform on an equity exchange can provide various advantages such as a trading engine platform and associated technology infrastructure can be shared with required segregation across various trading segments. This would help reduce cost and time.
Besides, the equity exchanges have a state-of-the-art surveillance system which provides real-time supervision of market activity and the same can facilitate members with common interest in securities and commodities.
