As against the current requirement to maintain different demat accounts for trading in stocks and commodities, the inception of universal exchange will allow traders and investors to trade in stocks and commodities through a single demat from October next year. This convergence and integration will enable exchanges to cross list products such as the dedicated commodity exchanges such as NCDEX and MCX shall then on lists stocks and stock derivatives while NSE and BSE shall lists different commodities and their derivatives.
So, this new ruling by SEBI announced on Thursday will do away with the hassle involved in opening a separate demat and trading account for trading and maintaining securities if one wishes to start trading in scrips and already maintains the aforesaid account for trading in commodities.
In simple terms, all of the commodity and stock exchanges in India will provide a platform to trade in commodities and stocks.
How universal exchange will benefit market participants?
Other than simplifying procedural formalities that are a pre-requisite before beginning with trading activity in shares or commodities, the measure will boost safety for market participants with highly regulated and transparent framework for trading, clearing and settlement.
In its meet on Thursday, the market watchdog took some other major decisions such as a provision that now allows promoters of the company to sell upto 2% of their stake through secondary markets. Norms for REITs is also being worked upon for rationalization. Also as foreign portfolio investors' interest in Indian equities is seen increasing amid booming phase norms for their entry shall be eased.