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India's NSE to introduce Brent crude oil in commodity derivatives segment with ICIS market data

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Oilfield Technology,

National Stock Exchange of India Ltd (NSE), the leading stock exchange in India, will launch its inaugural crude oil contract on 1 March, and has signed an agreement with ICIS, a leading global market information provider for the energy and petrochemical markets, to license its BFOE (Brent-Forties-Oseberg-Ekofisk) market data.

NSE has worked closely with ICIS to design a robust system that brings international best practice to help customers in India to access global crude markets. As part of the daily compilation of the index, NSE is licensing ICIS BFOE assessment data, which is produced five times a day in accordance with established ICIS methodologies.

The ICIS BFOE assessment data complies with the standards and principles set by the International Organization of Securities Commissions (IOSCO). ICIS BFOE data is audited annually; the most recent audit taking place in October 2018.

Mr. Vikram Limaye, MD and CEO, NSE said, “NSE is dedicated to deepen the Indian commodity markets by providing convenient and cost effective onshore hedging products. India being the third largest consumer of crude oil in the world, after the United States and China required an efficient hedging mechanism, this product will provide an opportunity to market participants for accessing the global crude oil markets and hedging their risk."

Dean Curtis, Managing Director, ICIS, said, “We are pleased to partner with the National Stock Exchange of India as the energy data provider of choice, reflecting the fact that ICIS continues to meet the high standards expected by the market and set by international regulators. Together, we look forward to assisting the development of oil benchmarks in India and supporting market participation and effectiveness.”

NSE shall launch two cash settled futures product – 100 bbl Brent Crude Oil Futures and 10 barrels Brent Crude Oil Mini Futures. The trading period for both these Futures will be between Monday to Friday and the trading session would be 9:00 am to 11:30 pm/11:55 pm IST* (*based on US daylight saving time period). The initial margin on this contract would be Min. 4 % or based on SPAN whichever is higher.

ICIS BFOE data is seen as global standard and is licensed by other international exchanges.

In the commodity derivatives segment, NSE has earlier launched futures contracts in gold and silver. The exchange also received SEBI approval to launch futures contracts in copper.

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