National Spot Exchange Limited : Membership

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Introduction

Membership of NSEL is available to individuals, partnership firms, corporate houses, HUFs, cooperative societies and other legal entities. Membership is granted to such entities, which comply with all requirements relating to admission fee, security deposit, annual subscription, qualification/experience and net worth criteria.

Members can trade on their own account or on accounts of their clients. They can also appoint their sub-brokers, franchisees, authorized persons and remisiers. Members can also set up their branch offices and franchises. Members/brokers can charge brokerage or commission from their clients, as may be negotiated between them.

Corporate houses, willing to use NSEL platform for procurement or sale of commodities, can either become a member directly or can trade through any of the members of the Exchange.

At present, NSEL has more than 800 registered members operating through over 56000 trader work stations across India. Government organizations and State Marketing Federations such as Food Corporation of India (FCI), MMTC, PEC, Cotton Corporation of India (CCI), NAFED, APMARKFED, RAJFED, etc. are members of NSEL and they have been actively utilizing the Exchange platform for selling various commodities.

Business opportunity for Exchange Members

Currently, E-GOLD, E-silver and E-Copper are the products in the E-series kitty launched by NSEL.

NSEL has recorded the turnover of 8591 Cr in E-Gold, E-Silver and E-Copper since its launch. There has been overwhelming response to the E-series contracts as evident with consistent increase in trade since its launch. In the month of December itself the turnover has clocked Rs. 4310.36 Cr. which is almost the half the turnover recorded since the March, 2010.

NSEL will launch similar trading facilities in around 20 non perishable commodities in near future, which includes Nickel, Zinc and so on. This will create a huge cash segment of commodities, with 1000s of crores of business every day. Exchange members, being the extension arm of the Exchange in servicing the clients, will be the largest beneficiary of this emerging market. In particular, it will create the following business opportunities for the Exchange members:

As a depository participant: It is expected that within next 3 years of operation, the number of beneficiary account to be opened by investors in this segment will exceed the number achieved in stock market so far. To start with, the existing clients holding their beneficiary account with their respective DPs will open separate account for trading in E-Series. If all equity shareholders having their demat account open their account for investing in demat commodities, income on account of DP charges will be double. Going forward, DPs will get opportunity to expand their business to hundreds of other centers, where such opportunity is totally untapped.
As a broker: In the process of emergence of this cash segment of commodities, the Exchange members can enroll lacs of investors willing to invest their funds into commodities. This includes expansion of broking activities to a number of remote locations, where electronic Exchanges have still not penetrated. This creates huge business opportunity for the Exchange members.
Financing against pledge of commodity ICIN: Exchange members having NBFCs in their group can explore the business of financing against pledge of demat ICIN, just like financing against shares. This will generate good revenue stream for the NBFCs.