India's Stock Exchange Ventures Into Gold and Silver Derivative Contracts

SEATTLE (Scrap Monster): The Bombay Stock Exchange (BSE) has announced launch of derivative contracts in gold and silver. The exchange has thus become the first in the country to launch these products. Until now, commodity contracts were launched only by specialized commodity derivatives exchanges-MCX and NCDEX.

Ashishkumar Chauhan, Managing Director and Chief Executive Officer, BSE announced today the launch of commodity derivatives platform on the exchange. Chauhan said that the exchange has already forwarded application to the Securities and Exchange Board of India (SEBI) with regards to the launch of crude oil and copper contracts. The stock exchange plans to launch more agri-commodities in the near future, he said. Chauhan added that the launch user-friendly commodity trading platform will help to deliver better price discovery, efficient timelines and reduced costs.

Meantime, SEBI noted that the commodities derivatives segment in the country is still at a nascent stage, despite offering over 40 different contracts. Commodity derivatives account for only 22% of the total derivatives traded in exchanges across the world, out of which India’s share is nearly 5-6%, said S.K. Mohanty, whole-time member, SEBI. Despite being the second largest gold consumer and leading producer of several commodities, the country still depends on benchmark prices from abroad, Mohanty added.