ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has approved super basmati paddy rice futures contracts for listing on the Pakistan Mercantile Exchange (PMEX).

The move will promote the electronic trading of agricultural commodities through the PMEX platform, a statement said on Wednesday. The SECP expects it will also help protect the interests of farmers in the agriculture value chain.

The last item inducted for trading into the PMEX was red chilli, which was introduced as pilot project in August 2015 and was subsequently rolled out on a full scale. In the current season, over 1,000 tonnes of red chilli were traded through the electronic platform of the PMEX.

The super basmati follows Irri rice, red chillis, cotton, palm oil, sugar and wheat that have already been listed for futures trade on the mercantile exchange. Non-agri listed products are copper, gold, silver and crude oil.

The SECP said benefits of using the PMEX platform includes quality-tested products, swift payment within 24-48 hours, price transparency and guaranteed delivery and settlement through the exchange’s mechanism.

The PMEX is the first exchange in the country to employ modern risk management techniques based on value-at-risk with a pre-trade risk check in real time.

The exchange acts as a central counterparty to both buyers and sellers and provide clearing and settlement using an online bank transfer mechanism.

The SECP said it is bringing reforms to agricultural commodity trading by encouraging traders to make use of the PMEX platform as a modernised route for buying and selling agricultural commodities in Pakistan.

The SECP has also incorporated the concept of agriculture promotion companies in the Draft Companies Bill 2016.

As a fully electronic exchange with nationwide reach, the PMEX started its operations in May 2007 as a successor of the National Commodity Exchange to broaden its mandate and scope of activity to trade all types of futures contracts.

The PMEX has an institutional shareholding. Its shareholders include National Bank of Pakistan, Pakistan Stock Exchange, LSE Financial Services, ISE Towers REIT Management Company, Pak Kuwait Investment Company and Zarai Taraqiati Bank.

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