SEBI okays NSE's plan for currency trading

with reference to post in month of June on www.livebombaystockexchange.blogspot.com regarding currency trading on Indian Stock exchanges read post now. SEBI finally gave it's nod to Currency trading on NSE

India's first exchange for trading in foreign currency derivatives is likely to go live on the NSE's platform. NSE, the country’s largest stock exchange by volumes, on Tuesday got an in-principle approval from the Securities and Exchange Board of India (SEBI) to start an exchange to trade foreign currency derivatives, sources said.

According to plans, NSE will have a separate segment on its existing stock and derivatives bourse to trade in forex derivatives. It would also use its clearing corporation to settle the trades on the new segment.

“It’s not only the NSE brokers, most of the large and medium sized banks have been very supportive in NSE’s endeavour to start a currency exchange,’’ a source said. “They will get another asset class to invest in,’’ the source added.

Last week RBI, the banking regulator, along with stock market regulator SEBI, had made public the rules that would govern currency derivatives exchanges in the country. Soon after three bourses-NSE, Multi Commodities Exchange (MCX), the largest commodities trading bourse in the country, and Bombay Stock Exchange (BSE), the oldest stock exchange in Asia-had jumped into the fray to start forex exchanges.

Over the last few weeks, both NSE and MCX, had been conducting awareness programmes among probable market participants for a currency trading platform. When a forex derivatives trading platform goes live, Indian investors would also get newer forex trading and hedging products, industry players said. At present, in the forex trading space, market participants have the option of either trading in spot or the forward contracts.

To start with, RBI-Sebi combine has allowed futures contracts in rupee-dollar contracts. The roadmap is to launch contracts on other currencies post the initial trading phase.

Courtesy: Times of India