The securities regulator is giving first priority to the introduction of commodity exchange and clearing corporation by relevant formulating rules and conducting required feasibility study, officials said.
The necessity of introducing the commodity exchange and clearing corporation has become stronger following the pressure of International Organisation of Securities Commissions (IOSCO) as a demutualised exchange cannot run based on sole product.
A top official of the Bangladesh Securities and Exchange Commission (BSEC) has said that it may take one year to introduce the proposed commodity exchange and clearing corporation.
"By this time we have included the term of commodity exchange in the Securities and Exchange Act 2012. The proposed demutualisation process is almost completed and now are giving first priority to the introduction of commodity exchange and clearing corporation," the BSEC official told the FE.
The section 32 (A) of the SEC Act reads: The business of Commodity Futures Contract or Options Contract, in the Commodity Exchange, shall be regulated in such manner and on payment of such fees and charges as may be prescribed.
A commodity exchange is an exchange where various commodities and derivatives products are traded.
On the other hand, a clearing corporation is an organisation associated with an exchange to handle the confirmation, settlement and delivery of transactions, fulfilling the main obligation of ensuring transactions are made in a prompt and efficient manner.
Presently, the Central Depository Bangladesh Limited (CDBL) is performing the job of clearing corporation.
"Within very short span of time, the BSEC officials will be given responsibility of conducting feasibility study on commodity exchange. We will look into the infrastructure while conducting the feasibility study prior to the introduction of commodity exchange," the BSEC official said.
He said the BSEC officials will also be sent to visit the commodity exchanges of other countries to have practical idea on the introduction of commodity exchange.
"The IOSCO put pressure on the BSEC to launch the commodity exchange before giving us 'A' category membership. We told them that it would be feasible to launch the commodity exchange after the completion of demutualisation process," said the BSEC official.
Meanwhile, two entrepreneurs have also applied to the securities regulator seeking permission to run commodity exchange.
On August 21, 2013 both the stock exchanges have signed a memorandum of understanding (MoU) to set up a joint clearing company for smooth transaction in the stock market and payment for derivative instruments.
"We will justify the proposal of the bourses before introducing the clearing corporation. But at the moment it is not possible to speak about the formation of clearing corporation," the BSEC official added.
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