World’S First Diamond Futures Contracts by ICEX (Download PDF)

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The Indian Commodity Exchange (ICEX) has launched world’s first diamond futures contracts providing exporters with means to contain their losses. ICEX received approval from market regulator Securities Exchange Board of India (SEBI) for trading in diamond futures contracts.

Image of World's First Diamond Futures Contracts By ICEX

Image of World’s First Diamond Futures Contracts By ICEX

Image of World’s First Diamond Futures Contracts By ICEX

Why in India?

  • India is a global diamond polishing hub, handling 14 out of every 15 rough diamonds polished

  • Futures contracts enable companies involved in cutting and polishing business to protect from price risks.

Details of the Trading and Certification

  • ICEX started trading in 1 carat/100 cent contracts and will add 50 cent and 30 cent contracts

  • Infrastructure to handle deposits, grading and sealing, vaulting, and delivery of diamonds for the futures contracts.

  • For trading futures, contracts sellers need diamond certified by De Beers-promoted International Institute of Diamond Grading and Research.

  • Certification allows electronic credit equivalent to carat deposited.

What is Indian Commodity Exchange (ICEX)

  • Recognized Stock exchange providing nation-wide on-line trading in commodity derivative

  • Public-private partnership with Reliance Capital, MMTC Ltd, Indiabulls Housing Finance Ltd, Indian Potash Ltd, KRIBHCO and IDFC Bank as major shareholders.

  • Established under the SCRA, 1956 under Section 131 (B) of Finance Act, 2015.

What is Securities Exchange Board of India (SEBI)?

The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992 to:

  • Protect the interests of investors in securities

  • Promote the development of and regulate the securities market

  • Drafts regulations in its legislative capacity

  • Conduct investigation and enforcement action in its executive function

  • Pass rulings and orders in its judicial capacity

This makes SEBI very powerful but appeals process creates accountability:

  • Securities Appellate Tribunal is a three-member tribunal headed by Mr. Justice J P Devadhar, a former judge of the Bombay High Court.

  • Second appeal lies directly to the Supreme Court

About International Institute of Diamond Grading and Research

  • De Beers Group of Companies established The International Institute of Diamond Grading & Research (IIDGR) in 2008

  • Provide services to ensure integrity of diamonds passing through their global laboratories

- Published/Last Modified on: September 20, 2017

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