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Money > Reuters > Report August 2, 2001 |
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Indian firms to start new commodity futures bourseIndia's regulator of commodity futures trading, the Forward Markets Commission has allowed a consortium of state-run and private firms to set up a new futures exchange in the country. The new Commodity Exchange of India is likely to be based in Ahmedabad in the western Indian state of Gujarat, a senior FMC official told Reuters on Thursday. "We have given an in-principle approval to a consortium to set up a new exchange and start domestic futures trading in all permitted oilseeds, their cakes and oils," the official said. The watchdog has asked the firms to complete all formalities within 10 months, after which trading can begin. India permits futures trading in over 35 commodities, including several oilseeds and oils, some fibres, coffee, cotton, turmeric and pepper. Sugar was recently added to the list. The FMC has said the firms must launch online trading, set up clearing, settlement and guarantee systems, provide real-time price and trade information, and install a warehouse receipt system for delivering commodities. The exchange is being promoted by an Ahmedabad-based private firm Neptune Overseas Ltd and the Gujarat Agro Industries Corp Ltd, which is owned by that state's government, along with some financial institutions and private firms. Neptune managing director Kailash Gupta said state-run firms, including Gujarat Agro and financial institutions, will hold 51 percent of the exchange's equity. Gupta did not list the names of the other participating companies. "We plan to introduce a screen-based online trading system at the exchange and are talking to some domestic firms to source the appropriate technology," Gupta said from Ahmedabad. MORE COMMODITIES The regulator has also allowed the Rajkot Seeds, Oil and Bullion Merchant Association, a groundnut, cotton and RBD palm olein. The exchange currently offers trading only in castor seed. "We got FMC's approval last month and are currently framing rules and regulations for trading in the added commodities," Vinod Dattani, assistant secretary of the exchange said. Trading in new commodities is likely to start in five to six months, he added. The combined trading volume of India's 19 commodity exchanges was 19.2 million tonnes in 2000-01 (April-March) compared with 17.7 million the previous year.
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