Debut on e-spot exchange soon

Gold is all set to glitter on the electronic spot exchange with the Mumbai-based Bombay Bullion Association having completed all preliminary works to flag off the proposed exchange in technical collaboration with the Financial Technologies (India), the technology supplier to the Multi Commodity Exchange (MCX).

If launched successfully, the spot exchange would be third of its kind in the world, only after the London Bullion Market Association (LBMA) and the Istanbul Bullion Spot Exchange (Turkey).

"The online trading facility was ready for the launch on Tuesday, but was delayed because of some technical problems. It would be ready for public trade very soon," said Suresh Hundia, president of the Bombay Bullion Association and proprietor of Hundia Exports.

The premier domestic gold trading body, which controls about 65 per cent of the yellow metal trade in the country, delayed the launch by a fortnight with the hope that the technical snag would be rectified very soon.

"At present, we are aiming to launch delivery-based gold trade with 1 kg denomination, but plans are also afoot to kick off 100 gm gold trade very soon," Hundia said.

The exchange will operate initially in Mumbai, followed by trading in Ahmedabad, Delhi and Chennai.

Later, the activity of the electronic bourse would be expanded to four other mini-metros in a month. The exchange would deal with three types of delivery bases "" same day, T+1 and T+2 "" depending on the choice of buyers.

On the successful launch of gold trading, it would also begin trade in 30-kg silver.

Experts believe that there has been no technical fault as such, but some traders do not want to see MCX and NCDEX on the same platform.

Both these exchanges have contributed significantly to the launch of the spot exchange. In addition to these two, four banks "" Nova Scotia, State Bank, ICICI and an unnamed bank "" are involved in the launch of the exchange.

Public sector trading firm MMTC and an unnamed public sector undertaking would be entitled for controlling logistics and deliveries on behalf of the spot exchange.

Leading mutual funds of the country have agreed to take active part in trading on the exchange, an analyst said.

Hundia said the association does not require any special permission from the state government or the Forward Markets Commission and, hence, the job becomes easier to directly jump on to the trade.

The association, with a membership base of about 1,000 across the country, trades in over a tonne of gold everyday through its registered members.