Daisy Watts 
Nov 13, 2023
The Pakistan Mercantile Exchange (PMEX) is the singular platform in Pakistan that enables the country’s traders to conduct future commodity trading. It centralises and regulates the trade. The Securities and Exchange Commission of Pakistan (SECP) has authorised PMEX for licensing and regulation of commodity trading.
Introduction to PMEX
The PMEX was first established in 2005, however, with the name of National Commodity Exchange Limited (NCEL). Then its mission was to lay the foundation of the commodity market in Pakistan.
In 2007, it became fully functional. Initially, it was inaugurated with the trading of gold futures contracts. Since then, the PMEX has not only functioned well, it diversified its offerings, encompassing a spectrum of commodities including palm oil, rice, crude oil, copper, silver, wheat, sugar, cotton, and more.
Mechanics of PMEX have been designed to spread equitable price discovery and risk management for the commodities trade across Pakistan.
The institution employs modern risk management methodologies depending on Value-at-Risk. PMEX is responsible for conducting real-time pre-trade risk checks. It also assumes the mantle of central counterparty, providing assurance to both buyers and sellers through an ultra-careful novation process.
The clearing and settlement procedures are executed on a T+0 (Transaction plus 0 days) basis, employing the convenience of online bank transfers.
PMEX's impressive reach
Spanning across the nation, PMEX boasts over 300 registered members, a diverse community comprising brokerage houses, individuals, and industry experts, ranging from traders to exporters and importers, all versed in the nuances of commodities.
Furthermore, PMEX has cultivated strategic alliances with global exchanges and institutions of repute, including the Dubai Gold and Commodities Exchange (DGCX), London Metal Exchange (LME), CME Group, Shanghai Gold Exchange (SGE), International Islamic Financial Market (IIFM), and many others.
PMEX has recently undergone a name transformation, shedding its former identity as NCEL. This change better encapsulates its expansive mandate, embracing a wide array of futures contracts. Moreover, to cater to diverse time zones and market demands, PMEX has extended its trading hours, now spanning 21 hours daily.
PMEX's adoption of cutting-edge tech
It has also embraced the MetaTrader 5 (MT5) trading platform, a cutting-edge tool that empowers traders to access multiple markets and instruments from a single platform.
PMEX remains steadfast in its commitment to fuel the growth of Pakistan's commodity sector. Its ethos revolves around fostering an environment conducive to trading, hedging, arbitrage, and investment. With aspirations to emerge as a leading regional and global commodity exchange, PMEX endeavours to introduce innovative products and services to its stakeholders.
