Leading stock exchanges BSE and NSE said on Wednesday they have received Sebi's approval to launch commodity derivatives segments and would start with non-agriculture commodities, including metals, from October 1.

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The move would achieve integration of trading in commodity derivatives market with other segments of the securities market at the exchanges level.

The exchanges have plan to launch derivatives trading in non-agriculture commodities in the initial phase, followed by agriculture commodities.

The Securities and Exchange Board of India (Sebi) last December, announced that from October 2018, the country would have a unified exchange regime wherein stock exchanges would be allowed to offer trading in commodities derivatives.

In a statement, BSE said it has received "another feather in its hat by getting Sebi's approval to launch commodity derivatives segment from October 1, 2018".

"BSE will begin trading in commodity derivatives with non-agriculture commodities like metals initially, followed by agri commodities subsequently," it added.

According to the exchange, its commodity derivatives platform will help in efficient price discovery, reduction in timelines, cost effective, user-friendly, robust risk management system and wider market penetration.

In a separate statement, NSE too informed that it has got Sebi's clearance for introducing the commodity derivatives segment. It will launch the segment on October 1.

Further, Sebi has also granted approval to NSE Clearing (Formerly known as NSCCL) for carrying out clearing and settlement of trades executed in the commodity derivative segment.

At present, the exchanges offer trading in equities, equity derivatives as well as currency derivatives.

NSE said it is committed to deepen the Indian commodity markets by providing convenient and cost-efficient onshore hedging mechanism for domestic as well as global participants. Investors would also be able to trade in multiple asset classes at a single trading venue resulting in resource efficiency.

Besides, BSE will conduct mock trading in live environment for the segment on Saturday. Larger rival NSE had conducted a similar session on September 1.

The board of Sebi Tuesday cleared a proposal to allow foreign entities with exposure to the Indian physical commodity market to trade in the commodity derivatives segment.

Such foreign entities would be allowed to hedge their exposures with derivatives trading in all commodities traded on Indian exchanges, barring sensitive commodities.

First Published:Sept 20, 2018 5:35 AM IST