The National Stock Exchange will finalise its list of commodity derivatives products to be launched on its platform in the next 1-2 months. It has also made the required technological changes for trading in commodity derivatives.
NSE, which is looking to offer trade in commodity derivatives such as energy and metals, is currently engaging brokers and other market participants for shortlisting such products with an aim to bring in a diversification in the segment.
On December 28 last year, the Securities and Exchange Board of India (SEBI) had announced that from October 2018, the country will have a unified exchange regime wherein stock exchanges will be allowed to offer trading in commodities derivatives. Detailed guidelines are awaited.
“Our technology platform is ready for commodity derivatives trading. Whatever technological changes were required has already been made for the segment,” NSE Chief of Business Development Ravi Varanasi told PTI.
The exchange is in the process of shortlisting commodity derivative products, which would be fit for trading in the market, the NSE official added. It is planning to launch trading in energy and metals.
“We are engaging with brokers and other market intermediaries for the purpose. The process of finalising the products should be completed in 1-2 months. We do not want to restrict ourselves from trading in any asset class or product in the segment,” he added.
While noting that many brokerages are in the process of consolidating their commodity and equity businesses, Varanasi said any plans to offer commercial incentives to trading members for transactions in commodity derivatives will be taken closer to the launch of the segment.
“Besides, we are also going to conduct programmes to help brokers understand the segment and its potential as well as make them aware of its usefulness,” he said.
NSE closest rival BSE had recently unveiled its plans for commodity derivatives trading. The exchange plans to enter the segment with non-agri products such as bullion, base metals, crude and natural gas. It has also announced a free membership for the commodities segment.
SEBI’s universal exchanges move is expected intensify competition among the BSE, NSE, and commodities players like Multi-Commodity Exchange and National Commodity and Derivatives Exchange.