The move to introduce a commodity exchange advances further, as the authorities concerned are set to formulate the rules and regulations along with identifying products for the exchange.
As part of the move, the Chittagong Stock Exchange (CSE) will sign a contract with the Multi Commodity Exchange of India Ltd (MCX) at a city hotel tomorrow (Tuesday).
The MCX will facilitate the port-city bourse to frame rules and regulations as well as identify products for the long-awaited commodity exchange.
Commerce Minister Tipu Munshi will be present as the chief guest of the contract-signing ceremony.
Bangladesh Securities and Exchange Commission (BSEC) Chairman Prof. Shibli Rubayat Ul Islam and Indian High Commissioner Vikram K Doraiswami will attend the programme as the special guests. BSEC Commissioner Dr. Shaikh Shamsuddin Ahmed will be the guest of honour.
According to the CSE officials, the port-city bourse will appoint the MCX as consultant and knowledge sharing partner for successfully establishing the commodity exchange.
A commodity exchange is a legal entity that determines and enforces rules and procedures for trading standardised commodity contracts and related investment products.
Among the south Asian countries, India, Pakistan and Nepal have established commodity exchanges.
The CSE finalised the process of appointing the Indian MCX after receiving primary consent from the securities regulator in October 2021.
The CSE officials said they developed a basic 'concept' for founding the commodity exchange in Bangladesh.
Following initial consent from the regulator, the CSE identified different areas and scopes of work on development of bylaws, and rules and regulations.
The other areas include product identification and creation of contracts, development of business plan, trading and market surveillance requirements, clearing and settlement system, quality assurance, and warehousing and delivery infrastructure.
The officials said the initial operations of their commodity exchange are likely to start with commodity futures having easy handling of products based on cash settlement.
"Gradually, stakeholders will come forward with their reliable structures," said a CSE official.
In its initial consent letter, issued on October 2021, the BSEC asked the CSE to ensure quality assurance measures and warehouse facilities for commodities before starting operations of the exchange.
Most of the commodity markets around the world conduct trading of agricultural produces and other raw materials, such as - wheat, barley, sugar, maize, cotton, cocoa, coffee, milk products, oils, and metals.
According to the BSEC's consent, the port-city bourse will have to ensure a registered warehouse facility for warehousing, storing and transferring commodities as well as set up a regulatory body for such activities.
The CSE officials said different products, such as - cotton, tea, gold, rice, potato, onion and jute, are under their consideration for trading through the commodity exchange.
