BSE to launch currency derivatives platform on Friday

Currency derivative contracts allow investors to take position on change in foreign exchange rates between pairs of two currencies

The Bombay Stock Exchange (BSE) will launch its platform for trading in currency derivatives from Friday, making it the fourth bourse in the country to offer such trades.

Other stock exchanges present in the currency futures segment are — National Stock Exchange (NSE), MCX-SX and United Stock Exchange (USE).

“The exchange is pleased to inform trading members that it will be launching trading in currency and interest rate derivatives with effect from Friday, November 29,” BSE said in a notification.

Currency derivative contracts allow investors to take position on change in the foreign exchange rates between pairs of two currencies, such as the rupee and dollar.

According to BSE, the currency futures trading would be commenced on the contracts on the US dollar-Indian rupee, euro-Indian rupee, British pound-Indian rupee and Japanese yen- Indian rupee.

“Currency options trading shall be commenced on the contracts on US dollar-Indian rupee,” it added.

Further, with a view to encourage active participation on its currency derivatives platform, BSE has also decided not to levy any transaction charges, until further notice.

However, the trading members in the currency derivatives segment would have to make a one time contribution of Rs 250 towards the ‘Investor Protection Fund’, it said.

According to the guidelines, trading on the segment would take place between 9 am and 5 pm. At present, rival NSE has the largest share in currency futures market, followed by MCX-SX. A lucrative segment, current futures market is estimated to be worth tens of thousands of crores of rupees.