New Delhi: The National Stock Exchange (NSE) on Thursday said it has received approval from markets regulator SEBI to invest in the proposed National Coal Exchange of India Ltd, advancing its plan to build a dedicated trading platform for physical coal. NSE said the approval marks a major regulatory step towards setting up a structured market for coal transactions.
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“The approval marks a key regulatory milestone towards setting up a structured market platform for physical coal trading in the country,” NSE said in a statement. The exchange added that the proposed platform is meant to facilitate electronic spot trading of coal through standardised contracts, with transparent price discovery and defined settlement mechanisms for producers, consumers and traders.
The SEBI clearance follows another regulatory step earlier this week, when NSE received approval from the Ministry of Corporate Affairs for reservation of the name “National Coal Exchange of India Limited.” NSE said in its press release that the approval “does not constitute any form of operational or regulatory license.”
NSE said it will soon approach the Coal Controller Organisation (COO) for the necessary licence to establish the exchange under the relevant regulatory framework. The move follows NSE’s board approval in February to create a wholly-owned subsidiary for the project, with a proposed initial capital infusion of up to Rs 100 crore. NSE plans to hold a 60 percent stake in the venture, while the remaining 40 percent will be offered to other shareholders.
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The exchange is intended to address inefficiencies in coal trading by enabling electronic trading of physical coal, improving price signals and widening access for smaller participants. Coal India accounts for about three-quarters of India’s coal output, which remains the basis for the case for a more formal market structure.