Public RelationsICEX to go live from today
The bourse to start with seven contracts.
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The Indian Commodity Exchange (ICEX), India’s fourth national multi-commodity exchange, is set to commence trading in agricultural and non-agricultural commodities from tomorrow. ICEX is promoted by Indiabulls Financial Services and MMTC.
Ajit Mittal, chief executive officer of ICEX, said the exchange would start with seven contracts out of the 12-13 approved by the commodity futures market regulator, the Forward Markets Commission. Mittal termed it a “soft launch”.
The exchange will kick off operations with two gold contracts of 100 gm and one kg, silver 30 kg, copper cathode, crude, guarseed and refined soy oil. The second set of contracts would be added very soon, Mittal added.
The exchange has so far registered 250 members. It has chalked out a countrywide campaign and awareness programme to enlist more members.
“We are planning to enlist those who are fence-sitters and are waiting for the exchange to go live. They will watch operations for a day or two and then decide on taking membership. We are optimistic of attracting them on our platform through a transparent price discovery mechanism, better surveillance system and efficient technology for zero-error operations,” said YN Bhargava, director (operations) of the exchange and MMTC’s nominee on the board.
Asked about the difference from the contracts active on other platforms, Bhargava said, “The contracts are almost similar in the beginning. However, our application for delivery-based copper cathode contract is under consideration.”
Currently, copper is a non-deliverable contract, settled arbitrarily between buyers and sellers with exchange as a counter-party.
ICEX also seeks to attract farmers for price discovery. Small farmers are at present barred from direct involvement in online futures trading. However, they have benefited indirectly from price displays on ticker boards in major mandis.
Bhargava said hedgers and speculators could save transportation costs by hedging in bullion through ICEX as MMTC would facilitate delivery. MMTC, being the country’s largest bullion importer, would deliver gold and silver to the members, he said.
ICEX will use the warehousing facilities of MMTC, Indian Potash and Krishak Bharati Cooperative (Kribhco).
The exchange has also received the regulatory nod to fix a flat concessional transaction fee of Re 1 for every Rs 1 lakh of contract value, irrespective of the slab.