Zee Business Exclusive: Sebi working on ‘One Commodity One Exchange’ policy; discussion paper likely within this week

Market regulator Securities and Exchange Board of India (SEBI) is working on ‘One Commodity One Exchange’ policy and is likely to bring a discussion paper on it soon. Zee Business’ Tarun Sharma shared this exclusive news. See the full report. 

SEBI is working on a new policy for commodities i.e. One Commodity One Exchange and the issue has been under discussion, previously too. But now the market regulator is expected to bring a discussion paper on this by this week, he said. 

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Under this policy, it could be proposed that if a new commodity is brought for listing on any exchange, then it must be traded on one exchange for three years. 

It could be traded on other exchange only after the completion of three years, he further said.  

The motive behind this move is to ensure volumes before it can be expanded to other exchanges. He said that overlapping could result in lower volumes that may become detrimental to exchanges’ interest to sustain the trading of that commodity. 

He said that the exclusivity will be given for that commodity to the exchange which files for its listing first. The exclusivity will remain for three years before opening it for others, he further said. 

The liquidity enhancement scheme and other benefits will be extended to the exchange which introduces a particular commodity first, Sharma said. 

This will also incentivise exchanges to introduce new products. After the FMC-SEBI merger, the expectations were that the commodities market will grow. That has not happened, he said. 

He said most exchanges have introduced base metals, natural gas and precious metals which were already being traded in large volumes.  

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This will allow exchanges to introduce new products and also work on it for the sustained period of three years, he said.