BSE inks pact with 2 entities to promote commodity derivatives, EGRs

With an aim to deepen commodities derivatives trade and proposed electronic gold receipt (EGR) markets in India, stock exchange BSE on Tuesday said it has collaborated with the Bhartiya Swarnkar Sangh (BSS) and Jamshedpur Jewellers Association (JJA).

The pacts are aimed at growing and developing value chain participants, enabling them to face competition and manage price risk better, the exchange said in a statement.

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BSE will participate with the BSS and JJA in seminars and various other programmes to educate the community about the commodity and derivatives markets and their benefits. This will also encourage commodity stakeholders to hedge on exchanges.

Other key aspects of the pact include BSE and the parties working together in order to design newer products on commodity contracts.

Sameer Patil, chief business officer at BSE, said the bourse is confident of playing the role of a vibrant gold exchange in both domestic and international zones.

The idea of spot trade via EGR and the international bullion exchange (IBX) will lead to greater assurance in the quality of gold supplied, efficient price discovery and transparency in gold for all stakeholders, he added.

"Through gold hedging the interests of small jewellers and gold traders can be safeguarded. There will be no negative effect of fluctuations in the price of gold on the stakeholders. Going ahead, BSE should add more delivery centres other than Ahmedabad," Duli Chand Karel, chairman, Bhartiya Swarnkar Sangh, said.

The pact with BSE will help members of Jamshedpur Jewellers Association mitigate price risks of gold in both domestic and international zones. This would further help members procure gold of highest quality thus making the industry more competitive in the local markets, said JJA President Vipin Adesara said.