Financial Daily from THE HINDU group of publications
Monday, Apr 22, 2002
Financial Daily from THE HINDU group of publications Monday, Apr 22, 2002 |
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Agri-Biz & Commodities
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Commodity Exchanges Online commodity bourse trading to be delayed Dhimant Bhatt
MUMBAI, April 21 THE proposed national multi-commodity on-line trading exchange could be delayed further with Forward Markets Commission (FMC) deciding to extend the deadline for submitting expression of interests. The decision assumes significance as FMC decided to wait longer despite receiving seven applications. The last date set earlier was April 18. After a review of the applications received so far, FMC on Friday decided to invite more parties. ``We have decided to extend the last date for receiving applications to May 31. The reason for extension is to give more and wider publicity for the multi-commodity exchange,'' the FMC Chairman, Mr Anand Bhatt, told Business Line. ``So far, we have received seven applications from different companies and organisations to set up such an exchange,'' he said. Among the applicants are ICICI Bank, Inter-Connected Stock Exchange Ltd, Federation of Rajasthan Trade and Organisation and other three existing commodity exchanges — the Bombay Commodity Exchange (BCE), Indore-based National Board of Trade and Online exchange and another newly set-up company. The criteria stipulated by the commission for the multi-commodity exchange are: efficient clearing, settlement and guarantee system; delivery of underlying commodity backed by a warehouse receipt system; real-time price and trade information dissemination; system of well organised and capitalise brokerage houses; transparency in operations and decision making; investment support from investors and experience in handling commodity markets and proper business plan. Presently, out of the seven applicants, BCE is the only exchange with relevant experience and ready platform to carry online futures trading. The exchange recently received 11 more commodities to trade online. The forward trading in commodities in the country at present is local and fragmented. However, there is a need for having a nation-wide institution for providing benefits of price-discovery and price-risk management to producer, consumers and market intermediaries; like stockists, exporters, importers, manufacturers etc. The institution need to have a demutualised form of organisation, professional management and should adopt modern best clearing and settlement practices and technology, as per the commission.
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