Sebi expects trade in interest rate futures in two months
Press Trust of India / Hyderabad Aug 21, 2009, 18:29 IST
Market regulator Securities and Exchange Board of India (Sebi) today said that it expects stock exchanges to launch interest rate futures in the next couple of months.
Interest rate futures are products designed as a hedge against risk because of volatility in interest rates.
"My information is that stock exchanges are in a fairly advanced stage of preparation. We should see some results in the next couple of months," Sebi Chairman C B Bhave told reporters on the sidelines of the convocation of the Institute of Insurance and Risk Management (IIRM).
A joint committee of Reserve Bank of India and Sebi has already released its report on interest rate futures. Earlier, Sebi had called for applications from the stock exchanges to start the market in interest rate futures.
The committee had recommended that these products be exempted from the Securities Transaction Tax. It also suggested that these contracts initially be based on the 10-year government security yield.
Earlier on August 19, the National Stock Exchange (NSE) had said it was likely to launch interest rate futures soon after getting approval from Sebi.
"We are working towards the launch of interest rate futures in a few weeks," NSE's Managing Director and CEO Ravi Narain had said in Mumbai.
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