Mumbai, Aug 18: A memorandum of understanding (MoU) was signed between the Bombay Oilseeds & Oils Exchange Ltd (BOOEL) and Solvent Extractors' Association of India (SEA) today to seek recognition from the government to run futures trading in all oilseeds, oils, oilcakes and related products.
The BOOEL-SEA tie-up had decided to introduce online trading in three phases to meet certain specific criteria laid down by the central government for the opening of futures trading in eight edible oilseeds, oils and oilcakes/oilmeals, SEA president Ajay Tandon told reporters here.
In the first phase, an online clearing and settlement system had already been established at a cost of Rs 35 lakh. For the second phase, an amount of Rs 50 lakh has been earmarked to connect Mumbai with Navi Mumbai to help many city-based players. To meet the expense, Rs 30 lakh would be funded by SEA, Rs 15 lakh by Prime Commodities Clearing Corporation of India Ltd (PCCCI) and BOOEL would contribute Rs 5 lakh, he said.
The third phasewould be to extend services to 20 trading centres at a cost of Rs 50 lakh funded mainly by new members and later, over 100 centres would be connected nationwide, Tandon said.
The MoU provided right to SEA to nominate two permanent directors on the board of each of BOOEL and PCCCI. BOOEL had agreed to start online trading facility for the benefit of SEA's up-country members by providing terminals at important cities across the country, BOOEL president Navinchandra Shah said.
SEA, as a chief supporting organisation, would provide to BOOEL and PCCCI technical knowhow, expertise, logistic support and also software and hardware. It would encourage SEA members to participate in the trading activities conducted by BOOEL, Shah said.
PCCCI would act as a counter-party guarantor to all the matched trades and also provide market integrity, the BOOEL president said.
Support to the clearing corporation was quite encouraging, Sandeep Bajoria, vice-president of SEA and director of BOOEL and PCCCI said, adding ``Bankof Baroda has already assured a contribution of Rs one crore towards equity capital of PCCCI and Union Bank of India has assured Rs 50 lakh.''
Regarding commencement of futures trading in oilseeds and oils, Bajoria said, ``we are ready at our side and the moment we get clearance from the government, we will start futures trading," the sources said.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.