Hope FM launches commodity option before Budget: PK Singhal, MCX

In a chat with ET Now, PK Singhal, President & Whole Time Director, MCX, says bullion is their star product but MCX just lost the opportunity for becoming a price setter in gold.

Edited excerpts:


What do you think about India's first international exchange -India INX -at International Financial Services Centre (IFSC) at Gujarat International Financial Tec-City (GIFT City)? INX is a wholly-owned subsidiary of the Bombay Stock Exchange (BSE), and will start trading initially in equity derivatives, currency derivatives, commodities derivatives. Subsequently , depository receipts and bonds would be offered once the required infrastructure is in place.

It is a great initiative taken by Ashish Chauhan who is MD, CEO of BSE and the way he has implemented it so fast, it is really creditable and we wish BSE all the best for the success of this venture.

How do you see things changing for the Indian market because this would like be a financial SEZ with all tax benefits being given? Does this really mean that we would be in a position now to compete with a market like Hong Kong, Dubai or Singapore?

As the Prime Minister has said, the purpose of having an international exchange is that the business that has migrated to the other places in the east like Singapore, Hong Kong should come back to India and we hope that in the time to come it will happen.

I know that MCX has also been planning and perhaps is at the final stages of setting up office in Gift City. How soon do we see MCX setting up its shop and making it operational? Also what is going to be your game plan for Gift City?

We already have a big office in the domestic side of the Gift City where we are going to have DR site and our regional office and other infrastructure for technology development and all those things. We are also looking into the feasibility of an international space. We have an MOU with Chicago Mercantile Exchange. So our setting up a venture here depends on the response from Chicago Mercantile Exchange also.

Any timeframe that you would like to present?

No. There is no timeframe but the possibility of having an international exchange from MCX cannot be ruled out but of course it all depends on our partner Chicago Mercantile Exchange.

In 2017, the market is looking at options to be launched, particularly on the commodity side. How are things shaping up?

MCX is ready for option since 2012 when we had a public issue but now the decision has to be taken by the regulator and we are expecting that it may come any day.

Perhaps this fiscal is when we will see that?

Yes, we hope so because the finance minister had mentioned this in the last budget speech. We hope that before the next budget speech, there should be some announcement about the introduction of options.

In terms of products from MCX stable, which would you expect to be comfortable because it would be only one product that the regulator will be allowing?

The market feedback is bullion is our star product but we just lost the opportunity for becoming a price setter in gold because impact cost on MCX gold contract was lower than the impact cost in any of the international exchanges. Once the Sebi allows it, in the first phase we will start in the gold contract.