Leading stock exchange BSE today said it has entered into a pact with Sohan Lal Commodity Management (SLCM) for supporting its much-awaited launch of agri-commodities trading.
Besides, SLCM will also carry out rating exercise at the warehouses as per its rating system and make arrangements for the display of commodity balances and price information, as necessary.
The rating system will be recognised for borrowing from the banks and other lending institutions and it will act as a yardstick for the purposes of trading and delivery on commodity exchange.
"BSE intent to operate as commodity exchange for facilitating online commodity derivative market in India and therefore this MoU (memorandum of understanding) with SLCM holds significant importance for availing warehouse management services for clearing and settlement of trades executed on our commodity derivative platform," Sameer Patil, head of business development at the exchange said.
Apart from providing its warehousing or storage facilities, SLCM will also provide its platform -- 'Agri Reach'-- at various locations as designated storage or delivery centres of BSE.
Further, the exchange will recognise some of SLCM's warehouses as BSE storage or delivery centres as a part of the agreement.
This arrangement with SLCM is part of BSE's preparation to launch commodity derivatives transactions from October 1.
"This tie up is synergistic for both the organisations as it will not only support BSE in its offering for its traders but it also gives a wider platform to SLCM for enhancing its business.
"Efficient warehousing services along with a smooth delivery of commodities are essential for success of goods and commodities trading. SLCM takes pride that our system, including our platform such as Agri Reach is fully equipped to support this initiative of BSE," SLCM Group CEO Sandeep Sabharwal said.
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