ICEX launches first derivatives contract in diamonds

Moneycontrol News

Indian Commodity Exchange (ICEX), a screen-based online derivatives exchange for commodities, went live today.

ICEX is a SEBI regulated Commodities Derivatives Exchange.

Reliance Capital, a part of Anil Ambani led Reliance Group, is the largest investor in the exchange.

ICEX is promoted by a mix of public-private partnership comprising PSUs including MMTC, Indian Potash, Krishak Bharti Cooperative (Kribhco) and IDFC Bank, among others.

ICEX completed a pre-launch mock trading between August 7 and August 11, 2017. The main purpose of the mock trading was to make the participants aware about technical features of trading system, hedging, to test robustness of the trading platform and to familiarise them with overall infrastructure logistics – front-end, back-end, internet network connectivity etc.

During the week-long mock sessions, ICEX saw a nationwide participation with 62 members and their clients taking part from 388 terminals. Out of the 8,013 clients who registered with the Exchange, 5,119 clients participated for the mock trading. Total trades during the week stood at 26,64,208.

The average daily turnover touched Rs 3,590 crores and the highest daily turnover reported was Rs 7,855 crores.

Today, ICEX commenced operations with the launch of Diamond Futures and is the world’s first derivatives contract in diamonds.

The exchange was formally inaugurated at a function held in Mumbai today.

The diamond contracts launched by ICEX initially will be in the size of one carat with compulsory delivery. This is likely to create a new market for the diamond industry players where the sellers can deliver their certified quality diamonds to different set of buyers from across the country.

At the inauguration, Sanjit Prasad, Managing Director and Chief Executive Officer of ICEX, said the exchange will provide fair price discovery and price hedging platform for the diamond industry.

He also said that nationwide trade participation will lead to efficient price discovery based on demand and supply fundamentals.

Till date, more than 100 members and around 4,000 clients have registered with the exchange.

International institute of of diamond grading and research (IIDGR), part of De Beers Group, to certify diamonds for the exchange delivery.

The Exchange has put in place necessary infrastructure to handle deposits, grading and sealing, vaulting and delivery of diamonds as part of its preparation for the formal launch of the diamond futures contracts.

MALCA, the world’s largest courier of diamonds, is the depository and transporter through its Indian arm Malca Amit.

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