BSE to launch currency, interest rate derivatives in December

LONDON Fri Nov 15, 2013 12:54am IST

The Bombay Stock Exchange (BSE) building is illuminated during the Diwali special trading session celebrating Diwali in Mumbai November 3, 2013. REUTERS/Danish Siddiqui

The Bombay Stock Exchange (BSE) building is illuminated during the Diwali special trading session celebrating Diwali in Mumbai November 3, 2013.

Credit: Reuters/Danish Siddiqui

Related Topics

Stocks

   

LONDON (Reuters) - The Bombay Stock Exchange (BSE) will launch currency and interest rate derivatives on its platform in the first week of December, its chief executive said on Thursday.

Speaking on the sidelines of the +91 Europe India Summit in London, Ashishkumar Chauhan told Reuters that BSE had received all the relevant regulatory approvals to launch the products, which will include rupee-dollar futures contracts.

BSE will become the fourth player in currency derivatives in India, after the National Stock Exchange, the MCX Stock Exchange and United Stock Exchange, in which BSE has a 15 percent stake.

But Chauhan believes there is still appetite for BSE's offering, as volatility in the rupee continues to make investing in alternative currencies attractive.

In contrast, India has struggled to develop liquidity in debt derivatives, depriving banks and other financial firms of a hedging opportunity.

Last month, the Reserve Bank of India (RBI) took action to reverse that, announcing it would introduce 10-year interest rate futures contracts by the end of the year.

Chauhan said those contracts would be included on BSE's platform.

The CEO declined to give any revenue targets for the products, saying BSE would first aim to grow market share and ensure the offering was sustainable. Revenue targets would likely be outlined six months after launch, he said.

BSE would keep transaction charges on the products at zero for those first six months, Chauhan added. Following that period, charges would rise to roughly 40 percent of what its competitors charge, reflecting the bourse's long-term strategy.

"We have always been the lowest cost, fastest, most high-tech liquidity platform in the country," Chauhan said.

The products will trade on technology BSE acquired from Germany's Deutsche Boerse(DB1Gn.DE), which will quicken trading speeds from 10 milliseconds to 200 microseconds.

(Reporting by Clare Hutchison; Editing by Mark Potter)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage