The Hindu Business Line : Govt permission sought for online day trading in gold

‘Day Trading’ in bullion on an electronic trading platform may become a reality for Indian investors if a proposal to set up an exchange for ‘spot’ trading in gold gets Governmental clearance.

The concept of a spot exchange in gold with settlement for transactions being done on a ‘trade for trade’ basis is currently permitted by the Government.

A ‘trade for trade’ settlement requires orders of purchases and sales to be individually delivered/paid for as the case may be.

However, the bullion trade is seeking the facility of transactions for the day being settled on a ‘net’ basis, which allows squaring up of positions of purchases and sales with one another. This is yet to be cleared by the Government, according to Mr Suresh Hundia, President of the Bombay Bullion Association.

“We expect to get the permission from the Government in 15 days to a month’s time,” he said.

The new venture is the initiative of Multi Commodity Exchange of India through its parent company Financial Technologies (FT) in partnership with Bombay Bullion Association (BBA) and State Bank of India.

Majority stakeholder

FT will remain the majority stakeholder with 51 per cent, the balance being distributed among a variety of stakeholders, Mr Hundia told Business Line on the sidelines of an international conference on bullion held here today.

He also indicated that BBA and the All India Bullion Association could pick up a 10 per cent stake each. Government enterprises, banks and funds could also hold around 20 per cent stake in the spot exchange, he added.

SBI will be the clearing and settlement body for the exchange, said a trade source.

“We are waiting for the association to get back with details of the proposal and we will be interested”, said Mr. O. P. Bhatt, Chairman, SBI.

The lot size for gold would be one kg, while that for silver would be 30 kgs.

More Stories on : Gold & Silver | Commodity Exchanges | State Bank of India

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