BSE to launch interest rate, equity derivatives by January

Leading stock exchange BSE is planning to launch interest rate derivatives and equity derivatives with advance systems by January.

 

Announcing this plan, BSE Managing Director and CEO Ashishkumar Chauhan also said bourse's primary objective is capital formation for India.

 

"Our primary objective is staying fully compliant and capital formation for India, and revenue is secondary," he told PTI.

 

"What will be good for the country will be good for us," he added

 

After the successful launch of currency derivatives last month, BSE is now ready to launch interest rate derivatives and equity derivatives with advance systems in January, he said.

 

Chauhan said the currency and the interest rate derivatives trading platforms are set to open new avenues to investors. "The BSE has been continuously trying to bring new products and asset classes to meet investor needs," he said.

 

An interest rate derivative is a financial product where the underlying asset (interest-bearing instrument) has gets paid or receive a notional amount of money at a given interest rate. Interest rate futures are used to hedge against risk of interest rate movements. Examples include treasury-bill and treasury-bond futures.

 

NSE had launched interest rate derivatives in 2009, offering futures contracts on 10-year notional coupon-bearing government securities, and introduced in 2011 on 91-day treasury bills.

 

The currency derivatives, launched on November 29 this year on the BSE, has achieved a turnover of Rs 1,030 crore on December 13 with 1,64,892 contracts, Chauhan said.

 

The products trade on technology BOLT+ , which BSE had acquired from Germany's Deutsche Boerse, which had quicken trading speeds from 10 milliseconds to 200 microseconds, making it the fastest trading platform in the country today, Chouhan claimed.

 

With the new technology BOLT+ will enable acceptance of 500,000 orders per second capacity, which in turn leads to the currency derivative exchange trading success, he added.

 

"The BSE trading platform is now 10 times faster than other bourses like NSE," Chauhan claimed.

 

"We are bullish with our new trading platform Bolt plus as it will be a boon for algorithm based traders. Almost 95% of total trade is generated from this segment," Chauhan said.

 

"We are also set to launch 10 years G-sec bond futures," Chauhan said.