Regulations approved for first commodity exchange

The Bangladesh Securities and Exchange Commission (BSEC) has approved rules and regulations necessary to run commodity exchange markets, paving the way for the Chittagong Stock Exchange (CSE) to launch the country's first such trading entity soon.

A commodity exchange determines and enforces rules and procedures for trading standardised commodity contracts and related investment products.

According to experts, a commodity exchange would allow farmers to lock in prices using forward contracting. This reduces the risk of a drastic price drop and squeezes out uneven ups and downs in commodity prices.

The CSE took the initiative to launch a commodity exchange in 2022 with the aim of reducing the difference between prices paid by consumers and producers.

In April 2022, the CSE appointed Multi Commodity Exchange of India Ltd as a consultant to help frame the rules and regulations.

The port city bourse received the licence to operate its commodity exchange in October 2023. However, it was unable to ensure logistics in the absence of the regulations.

The stock market regulator approved the Chittagong Stock Exchange (Commodity Derivatives) Regulations, 2025 at a meeting on Tuesday.

With the legal framework now available, the listing of derivatives, issuance of licences to brokers, and appointment of authorised representatives is now possible. The regulations also feature clearing and settlement criteria.

The commodity exchange will be a public limited company with a paid-up capital of Tk 4 billion.