MCX gets set for spot trading

The Multi Commodity Exchange (MCX) is ready with the basic infrastructure to start spot electronic trading in commodities under a separate company called National Spot Exchange Ltd.

So far only futures trading in commodities is currently allowed.

NSET is currently a subsidiary of Financial Techologies India Limited (FTIL). MCX MD and CEO Jignesh Shah said the group intends to keep 60 per cent stake in the spot market arm.

Nafed has picked up stake in NSET recently. Jignesh Shah told reporters here that the group is waiting for the model Agriculture Produce Marketing Control Act now being drafted by the Union government. Spot trading in commodity is governed by APMC Act of the respective state governments.

"We are ready to start spot trading in commodities but for that existing APMC Act of most of the states has to be changed. Now the Union government is coming out with a new model act where electronic spot trading of commodities is allowed. So we are waiting for that," he said.

Shah said he has also urged the West Bengal government to amend the APMC Act.

"Initially, I want to start spot trading in Gujarat, Maharashtra, Kerala, West Bengal, Rajasthan and Haryana. Some of the states like Kerala has already changed the APMC Act. Let see when we could introduce it," he added.

Commenting on the launch of potato futures, Shah said that it would be introduced from September 9 and MCX has already tied up with cold storages for infrastructure.