Sebi allows convergence of stock, commodity exchanges

Mumbai,  The Securities and Exchange Board of India (Sebi) on Thursday gave its nod to the convergence of both equities and commodity-backed stocks on exchanges from October 2018.

The decision taken at the Sebi’s Board Meeting was announced by the regulator’s Chairman Ajay Tyagi.

Tyagi said the convergence will be effective from October 2018 and will help in cross-listing and provide investors with access to various asset classes.

The move will allow major players like BSE, NSE and Multi-Commodity Exchange of India (MCX) to list both equities and commodity-backed financial instruments on their platforms.

The Union Budget 2017-2018 had proposed to further integrate commodities and securities derivative markets. The integration has been achieved in two phases.

“… The board approved the proposal to remove the restrictions by making suitable amendments to Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporation) Regulations, 2012 (“SECC Regulations”). The amendments to the SECC Regulations would be effective from October 1, 2018,” the regulator said in a statement.

According to Deepak Jasani, Head, Retail Research, HDFC Securities: “The move will allow bourses like the NSE and BSE to launch commodity products on their platforms.”

“This convergence will help an individual to have one account to trade in all asset classes. SEBI is also looking to simplify and rationalise norms for REITs (real estate investment trusts). SEBI Chairman said that the securities receipts can now be listed and traded on stock exchanges,” Jasani told IANS.

The decision had a mixed impact on the scrip of listed stock and commodity exchanges. Shares of BSE closed on a higher note at Rs 944 per share — up Rs 33.05 or 3.63 per cent.

In contrast, scrip of MCX closed 5.55 per cent lower at Rs 938.55 per share.

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