Universal Commodity Exchange, the sixth commodity platform, went live on Friday with 100 members on board. The exchange said it has another 200 application for membership under process.
Promoted by Commex Technology in joint venture with IDBI Bank, IFFCO, Nabard and REC, the exchange has started trading in 11 contracts across nine commodities - gold, silver, crude oil, chana, RSS4 rubber, mustard, soyabean, refined soya oil and turmeric.
In order to attract volumes, the exchange will charge a fee of Re 1 for every transaction totalling Rs 1 lakh for the first three months. However, it has fixed a four-slab fee structure based on the turnover.
As an inaugural offer, trading and clearing member are charged a concession membership fee of Rs 2.5 lakh against Rs 5 lakh, while a trading member have to shell out Rs 1 lakh against regular charge of Rs 1.5 lakh. The exchange will also be available on the commonly used ODIN trading platform. It has already got ready delivery centres for metals and agriculture commodities in major markets. Praveen Pillai, Chief Executive Officer of UCX, said that the exchange will focus on all the segments of commodity initially and work on specialisation after gauging the market response.
“Being the latest exchange, we may not have the first mover advantage, but we definitely know what we should not do. We have the option to learn from others mistake,” he said.
Commex Technology will be the anchor investor with 43 per cent stake, REC and Nabard owns 16 per cent each, IFFCO will hold 15 per cent and IDBI Bank 10 per cent. Commex has to progressively reduce its stake to 26 per cent.
Ramesh Abhishek, Chairman, Forward Markets Commission, said that the new exchange has to do something different from others to gain market share, particularly when there is a fall in overall turnover on commodity exchanges, low commodity prices, tight regulation and tough economic condition.
“Having said that, there is a tremendous scope in this market as there are several commodities which have huge demand and are unrepresented in the futures platform. UCX has its work already cut out,” he said.