BSE becomes first stock exchange in India to launch commodity derivative contracts in gold, silver

Highlights:

  • India’s leading bourse BSE became the first stock exchange in the country to launch the commodity derivative contracts in gold and silver.
  • Till date, commodity contracts are available only on MCX and NCDEX, the two specialised commodity derivatives exchanges in the country.
  • BSE has launched gold and silver derivative contracts and has applied for the launch of crude oil and copper contracts with Sebi. The stock exhange will subsequently launch more agri commodities.
  • The launch of commodity derivatives platform on BSE will help efficient price discovery, reduce timelines and make it cost effective.
  • The bourse also promises a user-friendly platform with robust risk management system and wider market penetration.
  • Despite the presence of about 40-plus contracts, country’s commodities derivatives segment is still at a very nascent stage.
  • Out of the total exchange-traded derivatives across the globe, the size of commodity derivatives is only 22 %, out of which India has a negligible share of 5-6 %.
  • The country is a leading producer of several commodities and the world’s second largest consumer of gold, but it depends on benchmark prices from abroad.
  • BSE has already registered 150 trading members and 27 clearing members for its commodity derivatives segment.
  • The exchange also waived off transaction charges for the first year in the commodities derivatives segment.
  • The commodity trading will be conducted from 10.00 am to 11.30 pm from Monday to Friday