BSE plans international exchange in Gujarat, commodity bourse

Conceptualised to replicate international finance centres such as Dubai, Hong Kong, London etc

As the 140-year-old Bombay Stock Exchange (BSE) charts a new growth path, it plans to enter the commodity trading business and also set up an international exchange in Gujarat to cater to global companies and investors, the company's chief executive said Tuesday.

"The stock exchanges, including BSE, need to change their business model and promote investment-based trading and help in capital formation to generate funds for investments across various sectors," BSE CEO Ashish Chauhan said.

The international exchange in Gujarat is conceptualised to replicate international finance centres (IFSCs) across the world, such as Dubai, Singapore, Hong Kong, London etc.

"Even Indian companies have to go and raise funds from those IFSCs. This concept has been deliberated several times in India as well, but could not fructify somehow," Chauhan said.

BSE, which is the world's largest exchange in terms of listed companies is also planning to foray into the commodity exchange segment, for which it has already received approval from markets regulator Securities and Exchange Board of India (Sebi). 

"We have got approval from the Sebi and from our board. The Sebi approval is to invest in a commodity exchange. However, we are yet to approach the commodity markets regulator Forward Markets Commission (FMC) for their approval.

"The application process takes a long time and once we submit the application to the FMC, it would go through it and then decide. Overall, it is a long process, but we have

 

the right technology and capabilities and we are very positive about it," Chauhan said in an interview.

As for whether the BSE would set up an entirely new exchange or acquire an existing one, he said the company had not yet decided on its strategy. "Now, since the approval from Sebi has come, we will discuss it internally and with our board. Accordingly, we will take a decision," he said.

Chauhan added that the exchange had applied to Sebi for its IPO in January 2013.

"As and when the approval comes, BSE will go ahead with the process of filing the Draft Red Herring Prospectus (DRHP) and other things. So, basically, we are awaiting the in-principle approval from Sebi," he said.