Oct 05, 2016

Diamond Trading on Commodity Exchanges May Commence Soon in India

Official trading in diamonds on a commodity exchange may commence soon in India after receiving a nod from the government and the market regulator, Securities and Exchange Board of India (SEBI) last week. 

In an official notification, the government updated the list of 91 commodities that can be traded in the derivative markets. Six commodities were added to the list including diamonds, tea, eggs, cocoa and brass among others. SEBI subsequently asked commodity exchanges to make the necessary amendments in their rules and regulations.

Media reports indicate that private exchanges have already begun to take steps in that direction. An official of a private commodity exchange was reported as having said that they had received in principle approval for trading in diamonds and were likely to commence mock trading shortly, based on which they will submit a detailed report to the regulator. The news report said that the exchange has already registered 100 unique client ids in the segment and about 50 of these, including diamantaires, have decided to participate in the process.