BSE, NSE can now offer cross currency derivatives
The market regulator, Securities and Exchange Board of India (SEBI) has given a go-ahead to leading bourses NSE and BSE to offer cross currency derivatives products.
The exchanges are eager to launch cross currency future and options products. Pairs such as EUR-USD, GBP-USD and USD-JPY, can now be offered by the exchanges. Currently, they are offering currency contracts like EUR-INR, GBP-INR, JPY-INR and USD-INR. Now, these currencies will also available for options trading. These trades can be placed between 9:00 AM to 7:30 PM. Stockbrokers, DIIs, FPIs are allowed to take positions in the cross-currency futures and options contracts.
Cross Currency derivatives enable direct hedging of exposures in foreign currencies and facilitate execution of cross-currency strategies by market participants, besides improving liquidity in existing contracts. Both exchanges can now offer more products to retailers and hedgers. This move will also help the exchanges compete against the growing popularity of foreign exchanges like SGX.
“The introduction of new products will allow entities like corporates, FPI and NRI to participate and to take positions in the exchange-traded currency derivatives markets. Besides, a longer trading session will enable market participants to capture key global events in pricing which they otherwise lose out,” said Ashishkumar Chauhan, MD and CEO of BSE.