1-Oct-2018: BSE commences commodity derivatives trading in Gold & Silver
History was created as BSE, Asia’s oldest exchange and now world’s fastest exchange with the speed of 6 microseconds commenced commodity derivatives trading in delivery-based futures contract in gold (1 kg) and silver (30 kg) on October 1, 2018. As part of the launch, BSE organized a bell ringing ceremony at the BSE International Convention Hall, which saw several notable dignitaries in attendance. Shri S.K. Mohanty, Whole Time Member, Sebi was the Chief Guest at the event.
The exchange will offer derivative contracts only in non-agriculture commodities initially, followed by agricultural commodities subsequently. In order to encourage more participants to join the commodity markets, BSE has decided to waive transaction charges for the first year of commodities market operations. Over the next 3-4 years, BSE plans to launch around 60 commodities on the exchange.
More than 450 members agreed to participate in the 1st phase. More than 150 members completed all formalities and were ready for trading on the very first day, on Oct 1st 2018. BSE expects more than 450 members to become active in the next 3-5 months and firmly believe BSE with its value proposition will become preferred choice going forward in the derivatives segment.
Over last few years, BSE has been ready with a robust infrastructure for delivery-based commodity trading. BSE has tied up with Indian Bullion and Jewellers Association, Gems and Jewellery Council, Cotton Association of India, Bombay Metal Exchange, Soyabean Processors Association, Federation of Indian Spice Stakeholders, etc. to assess the industry needs and develop suitable products. BSE has also associated with Brinks, Sequel, Sohanlal Commodity Management, etc. to develop a suitable delivery infrastructure in various commodities. BSE had initiated a mock trading in January 2018 to help brokers get accustomed to BSE systems.
At 6 pm, BSE had clocked turnover of Rs 36 crores in commodity derivatives segment.
About BSE: 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.
16-May-2018: BSE becomes India’s first exchange to be recognized as a Designated Offshore Securities Market by the US SEC
We are pleased to announce that BSE Ltd., Asia’s first stock exchange, has received recognition as a ‘Designated Offshore Securities Market’ (DOSM) from the United States Securities and Exchange Commission (SEC) under Rule 902 (b) of Regulation S under the U.S. Securities Act of 1933. BSE, becomes the first stock exchange in India to receive DOSM recognition and now joins an elite list of foreign securities exchanges that have been recognized as DOSMs by the SEC.
The recognition by the SEC speaks about the comparability of the international regulatory framework adopted by BSE, governing its structure, organization and disclosure standards. Companies listed on BSE can feel confident of the exchange being a listing venue of choice and comparable with a handful of exchanges globally, recognized for their standards by the SEC.
Advantages of the DOSM status
In brief, the DOSM status allows sale of securities to US investors through the trading venue of BSE without registration of such securities with the US SEC and thus eases the trades by US investors in India.
Previously, equity and bond securities listed and traded on BSE and issued in the U.S., could not generally be resold in non-prearranged trades executed through the facilities of BSE’s trading platform, without requiring that the seller forms a reasonable belief that the buyer is outside the U.S. Thus, effecting such transactions with U.S. persons without any restrictions under the Securities Act, 1933 was problematic. This will now be facilitated after BSE’s recent recognition as a DOSM. The status of DOSM will provide significant advantages that can facilitate securities offerings by BSE-listed companies, particularly to U.S. investors. For instance, BSE-listed securities, originally issued in the U.S., in transactions that are exempt from SEC registration, may be freely resold on BSE.
This is expected to primarily benefit securities issued in U.S. private placements to institutional investors. The availability of a liquid resale market is expected to make exempt offerings by BSE-listed companies more attractive to U.S. investors. The recognition will also enhance the attractiveness of Indian Depository Receipts (IDRs) amongst US investors. BSE’s new status will provide additional benefits to companies whose securities are traded both in the U.S. and on BSE. Certain directors and officers of dual-listed companies will be permitted to resell their securities on BSE, regardless of any restrictions or holding periods that may apply under U.S. securities laws. Finsec Law Advisors, acted as the sole counsel for BSE in securing the DOSM status and represented BSE before the SEC.
About BSE: 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 demutualized 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 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.
3-Jul-2018: MCX plans to enter into currency derivatives
The Multi Commodity Exchange of India (MCX), the country’s largest commodity bourse in terms of market share, plans to enter the currency derivatives segment. The exchange has been mulling an entry in the currency arena for a while now and the idea has even been discussed among the board of directors.
‘Continuous evaluation’: Starting a currency derivatives segment has been under continuous evaluation within the exchange and it has been discussed at the board level as well. While the board has been receptive, they have sought more clarity and hence the exchange is seeking further feedback from market participants. The unified licence regime kicks in on October 1 and will allow equity and commodity exchanges to expand their offerings by starting new segments. The BSE and the National Stock Exchange (NSE) have already announced plans for commodity trading under the new regulations framework.
The advent of universal exchanges provides multiple opportunities. However, at this point of time we see better opportunities in the commodity ecosystem. We continue to evaluate over time and expedite appropriately as and when needed.
Currency derivatives see average daily volumes in excess of ₹60,000 crore. The BSE is the largest player in the currency segment followed by the NSE with the Metropolitan Stock Exchange of India (MSEI) having small share. In June, it reported an average daily turnover of ₹33,961 crore on its currency derivatives platform while the NSE clocked ₹29,161 crore. MSEI reported a daily average turnover of only ₹239 crore in June.
MCX adding currency derivatives alongside commodity markets may facilitate hedging by import- / export-focused commodity merchants.
Dislodging incumbent market leaders in derivatives is difficult but forex contracts are homogenous and not subject to licensing such as Nifty futures. At the same time, MCX has nothing to lose here and market participants are likely to enjoy lower fees through competition, at least for a while.
Just like the equity segment, the commodity market is dominated by two entities — MCX and the National Commodity & Derivatives Exchange (NCDEX). While MCX mostly has energy, bullion and metal contracts, NCDEX has created a niche for itself with Agri-contracts.
8-May-2018: CriSidEx Jan-March 2018 readings show Micro and Small Enterprises (MSEs) confidence largely intact
The Second Quarterly CriSidEx Survey shows Micro and Small Enterprises (MSEs) had a better January-March 2018 (called the Survey Quarter, or SQ), driven by gains in the Manufacturing sector, compared with October-December 2017. CriSidEx is a sentiment index based on a diffusion index of 8 parameters (5 manufacturing and 3 Services) that have equal weights. It measures business sentiment among MSEs during the ‘Survey Quarter’ (SQ, or January-March 2018) and the ‘Next Quarter’ (NQ, or April-June 2018) on a scale of 0 (extremely negative) to 200 (extremely positive).
As in the First Survey, the Second Survey also gathered parametric feedback from 1,100 MSE respondents across India and sectors.
The CriSidEx score increased to 121 in SQ (January-March 2018) from 107 in October-December 2017, which validates the expectation of higher optimism made by the first quarterly survey. For April-June 2018 (called the next quarter, or NQ), expectations continue to be positive.
Within Manufacturing, Chemicals, Auto Components, and Engineering and Capital Goods-related MSEs reported strongly positive sentiment in SQ, while segments with a significant presence of unorganised enterprises such as leather & leather goods, and gems & jewellery were subdued.
MSEs in Auto Components, Chemicals, and Engineering and Capital Goods were the most optimistic about NQ.
The Services Sector also is largely optimistic. IT/ITeS, traders and health care providers had a healthy showing in SQ, but not so in logistics and construction/real estate-based MSEs. Traders, health care providers, and human resource services firms are expected to continue doing well in NQ.
Mr. Mohammad Mustafa, Chairman and Managing Director, SIDBI said that in terms of legal constitution, companies were marginally more positive than firms. Unorganised players, or micro enterprises with less than 10 employees, had a marginally larger share of respondents citing a subdued SQ.
MSEs in manufacturing are slightly more optimistic than their services sector counterparts. In terms of order book, production and capacity utilisation, MSEs expect the situation to improve further in April-June 2018, and we see that corroborated in the feedback on hiring.
Unorganised MSEs also reported a slight improvement in performance. About 13% of them, with less than 10 employees, reported a bad SQ compared with 22% in October-December.
Meanwhile, lenders hold a neutral view for NQ, with 9 out of 10 saying the overall business situation will be satisfactory.
As many as 7 out of 10 lenders did not find any change in the situation of MSE non-performing assets (NPA) accounts in SQ and majority of lenders do not expect an increase in NPA accounts in NQ.
3-Feb-2018: CRISIL, SIDBI Launch India’s First MSE Sentiment Index
The Union Minister for Finance and Corporate Affairs Shri Arun Jaitley launched CriSidEx , India’s first sentiment index for micro and small enterprises ( MSEs) developed jointly by CRISIL & SIDBI.
CriSidEx is a composite index based on a diffusion index of 8 parameters and measures MSE business sentiment on a scale of 0 (extremely negative ) to 200 ( extremely positive) . The parametric feedback was captured through a survey of 1100 MSEs in November –December.
CriSidEx will have 2 indices , one for the ‘survey quarter’ and another for the ‘next quarter’ once a trend emerges after few rounds of the survey , providing independent time series data.
The crucial benefit of CriSidEx is that its readings will flag potential headwinds and changes in production cycles and thus help improve market efficiencies. And by capturing the sentiment of exporters and importers , it will also offer actionable indicators on foreign trade.
Delivering his keynote address, the Finance Minister said that the health of MSME sector is extremely vital to the economy and with the number of steps taken by the government in the past 2 years , there is increased integration of MSME sector into formal economy.
MSME sector is backbone of the economy . It is one of the largest employer in the country and with the vast population where employment either in government or in the large industry itself has limited potential . This is one sector where people not only exhibit their entrepreneurial skills , become part of large value chains but also become job creators in the process. And that is the reason why a bulk of the jobs in manufacturing , trading have been created in this particular sector .” Having gone through the series of very major structural reforms in the last 2 years , this is also now phase for consolidation as far as economy is concerned. And this phase of consolidation will also be led by this MSME Sector.