National Spot Exchange (NSEL) has introduced E-Series products in the commodities market for the first time in India, starting with E-Gold on March 17, 2011. It is a formulation of system where now retail investors can trade and invest in commodities in the similar way they are doing so far for the equities. It is a unique market segment working in the same way like the cash segment works for equities where the Demat form of gold, copper and silver and Zinc are available for trade in smaller denominations.
This will bring a new flexibility in the functioning of the commodity market to provide better securities for the investors. The NSEL has made a few arrangements along with the National Securities Depository Limited (NSDL) and Central Services Depository (India) Ltd., as the depository for holding commodity units in an electronic form.
The entry into the market is made easy for the investors with the unique feature of trading only in demat form. The Depository participants play vital role in the settlement process; hence it is required for every member to open a special and separate account which is known as CM-Pool Account in the depository system, for the purpose of clearing trades done on NSEL. The Demats are sent directly to this account which makes the functioning easier for the investors and traders. The pay-in and pay-out system is being placed for the clients.
Simple steps are to be taken to open up the account for the retail investors who intend to trade in the E-Series products, they just need to register with one of the members of NSEL and the process goes similar to client registration process for trading in the equity market.
The plus point here is that the commodity investors can now easily trade in the Gold, Copper, Silver and Zinc. The electronic Demat trading in this area will now attract more investors and thus will lead to better growth opportunities in commodity trading. |
