BSE ties up with USFE for benchmark futures

MUMBAI (Reuters) - The Bombay Stock Exchange (BSE) has tied up with U.S. Futures Exchange (USFE) to list a dollar-denominated benchmark index futures contract on the Chicago-based electronic exchange, the firms said on Monday.

The futures contract based on India's Sensex, as the benchmark is called, would help investors in the United States to participate directly in India's equity markets without requiring American Depositary Receipt authorization, the exchanges said in a joint statement.

"The launch of a futures contract based on the Sensex will facilitate overseas investors in taking exposure to Indian equities," Rajnikant Patel, BSE managing director and chief executive, said.

Trading on USFE, the former Eurex US market, begins on Feb. 22, 2008, the exchanges said.

USFE's Sensex futures would trade 23 hours a day and settle monthly to the corresponding value of the BSE's futures contract.

The BSE's larger rival, the National Stock Exchange, has its Nifty dollar-denominated futures listed on the Singapore Exchange.

The BSE is India's oldest stock exchange, established in 1875. In May, it said it had completed the sale of 51 percent of its equity to 19 domestic and overseas investors, including 10 percent sold to two foreign exchanges, Deutsche Boerse and Singapore Exchange.

When asked about media reports on a possible initial public offer, Patel said: "I would neither confirm nor deny."