MCX Facilitates a Study Tour for Senior Officials of Securities Market Regulator from Nepal

Mumbai, February 15, 2018: A delegation consisting of senior officials from the Securities Board of Nepal (SEBON) and Ministry of Law, Justice, and Parliamentary Affairs, Government of Nepal, have been on a week-long working tour to Mumbai with a visit to Multi Commodity Exchange of India Ltd. (MCX) as part of their study tour on the functioning of commodity derivatives market in an effort to set up a regulatory regime and to launch commodity derivative markets in Nepal. The Government of Nepal has recently entrusted SEBON with the responsibility of regulating their country’s commodity derivatives market, and SEBON intends to acquire knowledge about market structures, products, processes and various regulatory aspects connected to commodity derivatives during their study tour to India.

As in many countries in South Asia, Nepal’s economy isalso heavily dependent on production, trade and exports of commodities,especially agricultural commodities. Agriculture is the main source of GDP,employment, and exports of the land-locked country, although less than 20percent of its area is arable. Through appropriate institutional support formarketing, price discovery and price risk management for agriculturalcommodities, which can be achieved by strengthening the commodity marketinstitutions, the government and its agencies hope to  

Mr. Mrugank Paranjape, Managing Director,MCX, said, “We are glad to share our knowledge andexperience in commodity markets with the dignitaries from Nepal. Thesubcontinent’s commodity markets have a lot of potential for growth and, as wehave experienced in the case of several commodities in India, the derivativesmarket for commodities is a great enabler in harnessing their potential for thegreatest benefits of their stakeholders.  However, to achieve this, it isimportant to formulate and execute enabling and robust guidelines at theregulatory and at the market level. We hope the visiting dignitaries find theirinteractions with us, as well as with other functionaries they are planning tomeet during the study tour, useful while framing such guidelines.” 

Mr. Paristha Nath Poudyal, Executive Director,SEBON said, “It is an enlightening experience for usto learn about market development and regulation of commodity markets from MCX,India’s largest commodity exchange and to reap the synergies between Nepal andIndia’s commodity sector. We are sure we would be able to acquire key learningabout the nuances of commodity markets, which would enable us to create theproper regulatory framework for orderly growth and development of Nepal’scommodity market”. 

He added, “We are indeed thankful to MCX for theopportunity to learn from their experiences in one of the fastest growingcommodity markets in the region, and also for arranging the close interactionswith key persons connected to India’s commodity markets, in and outside of theexchange, from which we intend to benefit a lot.” 

During their study tour, the delegation met thephysical market traders and member brokers of MCX. They are also scheduled tointeract with the senior officials from Securities and Exchange Board of India,and Reserve Bank of India.

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