The Chicago Mercantile Exchange could enter India`s booming commodity derivatives market if the government relaxes its rules, MD John Davidson said on Friday, agency sources reported.
CME also plans to offer its expertise to exchanges in India and is eager to help enable trading of Indian commodity derivatives elsewhere, Davidson said during his visit to India.
The Indian commodities market is growing at a remarkable pace, he said, adding that the exchange is planning to set up an office here sometimes.
The US investors would be interested in Indian commodity market as they have been in equities, Davidson said.
India allowed trading in commodity futures in 2002. Three exchanges, the National Commodity and Derivatives Exchange, Multi Commodity Exchange and National Multi Commodity Exchange were set up in 2003.
The trading volumes in these exchanges totalled Rs 15.6 trillion (USD 340 billion) during the April to August. Volumes stood at Rs 21 trillion during the fiscal year to March 2006.
Asked if the CME would be interested in picking up a stake in any of the Indian commodity exchanges, Davidson said that there is always a possibility, but there is no specific plan as of now.
A bill is pending in Parliament to permit foreign players to pick up stakes in Indian exchanges and take positions in commodity futures.
India`s commodity market regulator does not allow banks and financial institutions, both domestic and foreign, to trade in these markets.
The CME could help Indian exchanges start trade in a variety of economic derivatives such as those based on inflation, housing prices and non-farm employment, Davidson said.
The CME offers trading in derivatives of interest rates, equities, foreign exchange, agricultural commodities and alternative investments.
It is the largest futures exchange in the United States and the owner of largest futures clearing house in the world.
Source: My Iris