 "ICEX to re-launch futures trading in non-agro commodities early next fiscal")
Anil Ambani-led Reliance Group anchored Indian Commodity Exchange (ICEX) is set to re-commence futures trading in non-agro commodities by the early next financial year subject to regulatory approvals. The exchange has already floated membership drive.
“We are looking to re-start futures trading with non-agro commodities early next financial year after fundraising from existing shareholders gets over. We have already obtained permanent recognition from the Government of India. But, we would seek regulatory approval afresh if need arises,” said an official closely monitoring developments at ICEX.
The exchange is already in the process to build its team for which the Reliance Group has hired experienced staffs from other exchanges in commodity trade business. ICEX is also in the process to fill vacancies for senior level staffs through due process. The exchange’s board of directors led by representatives from its shareholders has already set up a five-member selection committee for the purpose.
The rights issue to raise Rs 50-100 crore is currently underway. According an official, ICEX’s rights issue, which opened in January 2016, was supposed to close on February 8.
But, the closing date was extended till February 23 due to the lack of subscriptions from its existing shareholders.
Five years after its launch in 2009 by Indiabulls Financial Services and the government owned MMTC, the exchange had suspended futures trading in commodities in 2014, due to weak financial performance. Reliance ADAG Group’s company Reliance Exchange Next, a wholly-owned subsidiary of Reliance Capital, entered through the purchase of 26% stake from Indiabulls in January 2011.
After merger of the erstwhile regulator the Forward Markets Commission (FMC) with the markets regulator the Securities & Exchange Board of India (SEBI) in September 2014, it was ruled that exchanges would require to seek fresh approval from the regulator in case futures trading remains suspended over one year. ICEX has suspended futures trading over two years ago.
In December 2015, Anil Ambani, the Reliance ADAG chairman, had told shareholders of Reliance Capital, "(We) are now in advanced preparations (to) relaunch ICEX and expect to grow the business in a significant manner, so as to attain the leadership ranking in three years."| ROUND TWO |
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Sources said, if all goes well the exchange would start offering futures trade as early as December. ICEX plans to hire its MD & CEO either from the stock exchanges or commodity markets. What is envisaged is 10-15 years of experience and mot more than 50 years of age. Age and experience, however, could be relaxed for a suitable candidate.
Ambani had said there was huge potential for growth in commodity futures trading. “Precious and industrial metals hold enormous potential. Daily average commodity volumes in India are a meagre 0.2% of the gross domestic product, as compared to the Chicago Mercantile Exchange which enjoys 26% of volume of the United States GDP, which constitutes Rs 290 lakh crore."
In India, all exchanges cumulatively clocked a turnover of nearly Rs 60 lakh crore in 2014-15, a 40% decline from Rs 101 lakh crore the previous year.
In 2015, sources said that Bharti Airtel Group veteran Akhil Gupta had become an investor in ICEX, buying a 5% stake in the bourse, valuing it at Rs 200 crore. Another Delhi-based investor, Vijay Sharma of BN Enterprises, also bought 5% in ICEX in personal capacity from state-run MMTC ahead of a rights issue. But, ICEX website continued to display MMTC with 26% stake with new investors remained absent from the list of shareholders in the exchange.
