Reliance Commodities, a part of Reliance Money, kicked off trading operations on the Dubai Gold and Commodities Exchange (DGCX) from Wednesday.

This is the first initiative by Reliance Money to offer commodities and currency trading facilities outside India. Through its international operations, Reliance Money will offer cost-effective hedging options in gold, silver, fuel oil, steel and currencies to non-resident Indians (NRIs) and resident Indians in Dubai and neighboring countries.

Sudip Bandyopadhyay, CEO and director, Reliance Money, said, ?Firstly, there are certain restrictions in India with respect to commodities trading, which has barred investors from taking direct exposure to products offered by global commodities exchanges. Though, resident Indians are permitted to invest upto $2,00,000 annually overseas, they are not allowed to invest their margin money in the commodities future. Secondly, Forward Markets Commission (FMC), the Indian commodities regulator, has barred brokers of foreign origin from operating their terminals in India. This has limited the growth of commodities futures trading in the Indian

market.?

However, having said that, the present launch of operations on DGCX by Reliance Money would facilitate trading and hedging activities of its international clients in a cost-effective manner, added Bandyopadhyay.

DGCX is a fully automated, online commodities exchange and an initiative of the Dubai Multi Commodities Centre (DMCC), the government of Dubai which is the majority shareholder, along with Financial Technologies (India) Ltd and Multi Commodity Exchange of India Ltd (MCX).

Malcolm Wall Morris, chief executive officer (CEO), DGCX said, “We are the fastest growing commodities exchange in the region and it is good to see India’s Reliance group, the country’s largest private sector player, becoming a member of the exchange.?

Travel for the story was sponsored by Reliance Money

DGCX posted a growth of 65% in 2007 with number of contracts traded rising to 9,00,000. In January, growth has been 75% on a year-on-year basis. Of the 220 members, 147 DGCX members are active. DGCX’s Dubai location fits the critical time zone between the markets in Europe and Far East. The exchange operates with strategic tie up with CBOT/CME, Tokyo Commodity Exchange and Bursa Malaysia. DGCX is also exploring the possibility of expanding its list of commodities in which futures contracts can be offered and would soon offer plastics futures, added Morris.