BSE Sign’s Agreement with London Metal Exchange Limited (LME)
Mumbai, October 3, 2018: India’s premier stock exchange BSE, Asia’s oldest exchange and now world’s fastest exchange with the speed of 6 microseconds, has entered into an a licensing agreement with the London Metal Exchange (LME) a premier base metals-focused commodities exchange.
The London Metal Exchange is the world center for the trading of industrial metals – the majority of all non-ferrous metal futures business is transacted on LME platforms.
The Securities and Exchange Board of India (SEBI) had on December 28, 2017 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.
The BSE has begun trading in commodity derivatives from October 1, 2018 with non-agriculture commodities like metals initially, followed by agri commodities subsequently.
The partnership will strengthen BSE's and LME's global collaboration and support opportunities that will mutually benefit the exchanges. The agreement is designed to facilitate closer cooperation in areas such as product development, training and the sharing of market resources. The licensing agreement will also allow BSE to use the prices of LME's Base Metals contracts to price its proposed base metals futures contract.
Shri Ashishkumar Chauhan, BSE MD & CEO said, “The agreement will enable a better understanding of the market dynamics of the base metals industry in India. It will integrate the Indian market with the global market more effectively and foster world-class best practices in commodity derivative market. The agreement will enable us to work together towards our mutual interests, enhance business opportunities, extend global reach and will gradually result in benefits for our customer base and also help in bringing exciting products to the Indian marketplace. We are happy to provide the Indian metal industry with a mechanism to hedge their price risk, based on a globally efficient market, within the country, at an affordable cost and at no additional risk.”
BSE (formerly Bombay Stock Exchange) established in 1875, is Asia’s first & now the world’s fastest Stock Exchange with a speed of 6 microseconds. BSE is India’s leading exchange group and has played a prominent role in developing the Indian capital market. BSE is a corporatized and demutualised entity, with a broad shareholder base that includes the leading global exchange- Deutsche Bourse, as a strategic partner. BSE provides an efficient and transparent market for trading in equity, debt instruments, equity derivatives, currency derivatives, interest rate derivatives, mutual funds and stock lending and borrowing.
BSE also has a dedicated platform for trading in equities of small and medium enterprises (SMEs) that has been highly successful. BSE also has a dedicated MF distribution platform BSE StAR MF which is India Largest Mutual Funds Distribution Infrastructure. On October 1, 2018, BSE launched commodity derivatives trading in delivery-based futures contract in gold (1 kg) and silver (30 kg).
BSE provides a host of other services to capital market participants including risk management, clearing, settlement, market data services and education. It has a global reach with customers around the world and a nation-wide presence. BSE’s systems and processes are designed to safeguard market integrity, drive the growth of the Indian capital market and stimulate innovation and competition across all market segments.
Indian Clearing Corporation Limited, a wholly owned subsidiary of BSE, acts as the central counterparty to all trades executed on the BSE trading platform and provides full novation, guaranteeing the settlement of all bonafide trades executed. BSE Institute Ltd, another fully owned subsidiary of BSE runs one of the most respected capital market educational institutes in the country. Central Depository Services Ltd. (CDSL), associate company of BSE, is one of the two Depositories in India.
Yatin Padia / Rahul Vyas
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