Rohit Bansal - IIT Roorkee

futures, with respect to the number offutures contracts traded.MCX has been certified to three ISOstandards including ISO 9001:2000Quality Management System standard,ISO 14001:2004 EnvironmentalManagement System standard and ISO27001:2005 Information SecurityManagement System standard. TheExchange‟s platform enables anonymoustrades, leading to efficient pricediscovery. Moreover, for globally-tradedcommodities, MCX‟s platform enabledomestic participants to trade in Indiancurrency. .The Exchange strives to be at theforefront of developments in thecommodities futures industry and hasforged strategic alliances with variousleading International Exchanges,including Euronext-LIFFE, LondonMetal Exchange (LME), New YorkMercantile Exchange, Shanghai FuturesExchange (SHFE), Sydney FuturesExchange, The Agricultural FuturesExchange of Thailand (AFET), amongothers. For MCX, staying connected tothe grassroots is imperative. Its domesticalliances aid in improving ethicalstandards and providing services andfacilities for overall improvement of thecommodity futures market.Why are Commodity DerivativesRequired?India is among the top-5 producers ofmost of the commodities, in addition tobeing a major consumer of bullion andenergy products. Agriculture contributesabout 22% to the GDP of the Indianeconomy. It employees around 57% ofthe labor force on a total of 163 millionhectares of land. Agriculture sector is animportant factor in achieving a GDPgrowth of 8-10%. All this indicates thatIndia can be promoted as a major centerfor trading of commodity derivatives.It is unfortunate that the policies of FMCduring the most of 1950s to 1980ssuppressed the very markets, it wassupposed to encourage and nurture togrow with times. It was a mistake otheremerging economies of the world wouldwant to avoid. However, it is not in Indiaalone that derivatives were suspected ofcreating too much speculation that wouldbe to the detriment of the healthy growthof the markets and the farmers. Suchsuspicions might normally arise due to amisunderstanding of the characteristicsand role of derivative product.