SECP approves rice futures trading

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) on Wednesday approved the trading of super basmati paddy rice future contracts at the Pakistan Mercantile Exchange (PMEX).

“This listing will further our endeavour to promote electronic trading of agricultural commodities, and also protect the interests of participants in the agriculture value chain, particularly, farmers,” the SECP said in a statement.

In August, the Securities and Exchange Commission of Pakistan had already approved the red chilli futures contract. After a successful pilot, it has been rolled out on a full scale, it added. In the current season, more than 1,000 tons of red chilli has been traded through the electronic platform of Pakistan Mercantile Exchange.

Benefits of using the platform include quality tested product, swift payment within 24-48 hours, price transparency and guaranteed delivery and settlement through the exchange mechanism. The SECP is fully geared to bringing about reforms in agricultural commodity trading by encouraging traders to use the PMEX.

For this purpose, the SECP has incorporated the concept of agriculture promotion companies in the Draft Companies Bill 2016, which includes producer and collateral management companies. The said framework will be put forth for public consultation next week, said the SECP.