Bombay Commodity Exchange offers to share online system

Mumbai: The Bombay Commodity Exchange (BCE) has offered its Internet-based online transaction system to other Indian bourses to expand commodity futures trading in the country, a top official said.
The exchange is conducting trials on a web-based trading platform at its website www.bceindia.com and hopes to launch commercial operations soon, Mr Anjani Sinha, chief executive officer of the exchange said.

It offers futures trading in 10 commodities like castorseed and RBD palmolein, and is awaiting Government approval to trade in another 11 farm products.

India allows domestic futures trade in about 35 commodities, including several oilseeds and oils, some fibres, turmeric, pepper and castor seed. Sugar was recently added to the list but futures trade in grains such as wheat and rice is banned.

“We have offered our readymade platform to other exchanges with an objective of overall growth and prosperity of commodity futures trading in India,” Mr Sinha said. Four exchanges have so far responded positively, he added.

India has a total of 19 commodity futures exchanges. All these bourses, save the Coffee Futures Exchange, currently operate on an open outcry system.

The coffee exchange started a screen-based transaction system on a limited scale recently. It offers online trading at its two centres and plans to expand by the year-end.

The BCE trading platform, developed by computer software and trading firm SSI Industries, can handle about 100,000 transactions per day.

“Our system can take the load of India’s entire commodity futures trade,” Mr Sinha said, adding people can trade from any location in the country.

Under the proposal, exchanges would share the common platform and each user would pay a transaction fee to the BCE based on their total volume, he said.

“This is an ideal offer for most of the exchanges as their trading volume does not support huge initial investments in such technologies,” Mr Sinha said.

The system could enable members of participating exchanges including the BCE to trade in all commodities contracts offered by the bourses involved if they wished. If not, there is a facility for exchanges to block access of members to commodities offered by other bourses, he added.

Member exchanges can also work together to develop other systems like a warehouse receipt mechanism with electronic networking as business picks up, Mr Sinha said.

-- Reuters