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National Commodity and Derivatives Exchange (NCDEX) has signed technology agreement with London Stock Exchange Group Company MillenniumIT to roll out a new trading platform which is expected to be faster, transparent and vigilant.
Over a period of time the exchange plans to integrate different legs of the trade such as spot, forward and futures on the new system NextGen. It was using software provided NSE IT for last 11 years. The new system will provide enhanced functionality and enable additional product launches with minor changes.
Speaking to media at a press conference on Tuesday, Samir Shah, Managing Director, NCDEX said the speed of trade executed on the exchange would increase to 500 micro second from two million second, though speed of execution is not as critical in commodity markets as in stock exchange.
The deal will also help NCDEX in product innovation by accessing products being traded on 40 other exchanges being serviced by MillenniumIT and modify them to interest Indian investors, he said, claiming the pact with the IT company to be worth multi-million dollar.
Mack Gill, Chief Executive Officer, MillenniumIT said the company provides software support to Kotak Group-owned Ace Derivatives and Commodity Exchange and Indian Commodity Exchange, which recently suspended trading.
Adoption of the new platform at the clients’ end needs minimum modification as the software uses internationally accepted FIX (Financial Information eXchange) protocol language.
The exchange believes the technology will be an important enabler in its efforts to bring innovative offering to the market and enable to execute regulatory changes in a quick and efficient manner.
With the capability to handle high frequency trade, NCDEX expects algo trade to grow multifold from 12 per cent of the whole pie. Algo trade is an automated order executed on specified price points.
NEW LAUNCHES
NCDEX plans to launch its much awaited India gold futures contract in next three week. The contract will accept gold refined by Indian companies for delivery apart from international refineries accredited by the London Bullion Market Association. The exchange has accredited domestic bullion refiners for the new contract. The accredited refineries will increase the availability of gold deliverable on the exchange.
“In last few months, we have launched a slew of products on the forward and futures segment and would focus on to bring liquidity in these contracts,” he said.
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