Just two months before it launched currency derivatives in August, the National Stock Exchange (NSE) picked up 26 per cent stake in Bangalore-based front-end technology provider Omnesys Technologies.

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What is interesting is that Omnesys is among the few vendors that subsequently got the application programming interface (API) from NSE for its currency futures segment. API is the interface platform between brokers and the exchange.

NSE Deputy Managing Director Chitra Ramkrishna is also a director on the board of Omnesys, according to documents from the registrar of companies. In fact, the IT firm, which is also an accredited vendor with the NSE, made a fresh allotment of shares on June 26, which was approved in an extraordinary general meeting held on June 30. It was at this time that Dotex International, a wholly-owned subsidiary of NSE, along with several other individuals picked up shares of Omnesys.

While NSE did not want to comment on the issue, sources familiar with the developments said that the purchase of the stake may only be a financial investment and has been done to provide affordable software to NSE members. But market experts termed the NSE-Omnesys deal as highly unusual.

Omnesys is an empanelled vendor on both NSE and BSE for providing trading solutions to their members. It has recently been empanelled by the MCX Stock Exchange as well. Apart from NSE.IT, a 100 per cent subsidiary of NSE, other vendors include Financial Technologies India (FTIL) and Religare Techno Global Services (formerly Asian CERC). As MCX-SX, which is promoted by FTIL, is a competitor of NSE in currency futures, NSE did not use the software developed by FTIL. Instead, it authorised Omnesys for providing software for currency futures. All the vendors apart from FTIL have got API from NSE. FTIL’s flagship product ODIN has an 80 per cent market share in front-end trading solutions and hence its users form a large portion of the market.

While NSE started currency futures trading on August 29, MCX-SX launched it on October 6. The daily turnover in the currency futures market is about Rs 2,000 crore, with both exchanges sharing about half the business each.

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