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Spot trading in coal will commence soon with the setting up of a spot exchange, Securities and Exchange Board of India (SEBI) Executive Director VS Sundaresan said.
Delivering the Special Address at the two-day ‘Commodities Market Outlook 2022’, organised by BusinessLine on Thursday, he said: “Once coal spot exchange stabilises, derivatives in coal will also commence. This augurs well for the energy sector.”
Earlier this year, Coal Ministry officials said that the government had plans to have a mature trading platform by the time commercial coal mines become operational in 5-7 years when 40 per cent of the coal in the country will be mined by companies other than Coal India Ltd.
On November 25 last year, the Coal Ministry floated a request for bid for the selection of a consultant to assist the Ministry in setting up the country’s first coal trading platform. The coal exchange will facilitate efficient market-based pricing mechanism and facilitate price discovery besides ensuring transparent market mechanisms.
Electricity derivatives
Sundaresan said trading in electricity derivatives will commence shortly as both operational and legal issues areas have been resolved.
The Multi Commodity Exchange has got SEBI’s approval to launch the derivatives and has readied the contract specifications, according to sources. The exchange is likely to launch the derivatives next month.
The power crisis in China and other parts of the world, including India, add significance to the electricity derivatives too.
Gold exchange
Sundaresan said SEBI was in the process of coming out with detailed operational guidelines to make the gold exchange functional over the next few months. The gold bourse will bring in retail players to the regulated market and ensure transparency in the price setting for the precious metal.
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