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Latha Venkatraman
Dhimant Bhatt

MUMBAI, Jan. 8

THE Government has approved the status of `National Multi-Commodity Exchange' for two commodity exchanges.

The Ministry of Consumer Affairs, Food and Public Distribution granted this to Online Commodity Exchange of India Limited (OCEIL), Ahmedabad, and National Board Of Trade (NBOT), Indore.

The Forward Markets Commission (FMC) has forwarded to Government the draft notification making OCEIL a national multi-commodity exchange, Mr Anand Kumar Bhatt, Chairman, FMC, said. NBOT, on the other hand, was given in-principle approval.

According to Mr Bhatt, OCEIL has its infrastructure in place and had been carrying out futures trading in several commodities. In the case of NBOT, the exchange has been given 10 months to upgrade its infrastructure, which primarily involves setting up of online trading.

It has been given in-principle approval and will be accorded the final approval once it puts in place online trading, Mr Bhatt said. Besides, according to him, NBOT has also to complete the process of de-mutualisation.

Mr Kailash Gupta, Managing Director, OCEIL, confirmed that the exchange had been granted formal permission to become a national multi-commodity exchange.

"Currently, we are connected online to nearly 20 cities across the country. Over the last two months, our exchange has been handling futures trading in 24 commodities with 53 contracts, mainly in oils. In the next 3 to 4 months time, we intend to include more commodities in our trading list such as spices, jute, gur and soya,'' Mr Gupta said.

"About new membership, the exchange will not go for immediate expansion of membership. First, we will perform then we will expand our base. At present, the membership strength is 115,'' he said.

Four exchanges were shortlisted including the ICICI Bank-National Stock Exchange combine. The criteria stipulated by FMC to be a national multi-commodity exchange were : efficient clearing, settlement and guarantee system; delivery of underlying commodity backed by a warehouse receipt system; real-time price and trade information disseminationand proper business plan. Earlier, a plan to set up the National Commodity Exchange (NCE) by a consortium consisting of the National Stock Exchange (NSE), ICICI Ltd, Mahindra & Mahindra Ltd (M&M) and Punjab State Warehousing Corporation (PSWC), fell through due to a lack of consensus on where the bourse should be located. This proposal had received clearance from FMC.

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