NSE invites applications for currency futures trading

National Stock Exchange (NSE) is all set to kickstart the process of trading in currency futures soon after getting the in-principle nod from the capital markets regulator, Securities and Exchange Board of India (Sebi).

The exchange today invited applications for membership in the currency derivatives segment.

The networth requirement for trading membership in the case of brokers who are already members of NSE is Rs 100 lakh and the fee for a trading-cum-clearing membership is Rs 10 crore.

The deposit requirement for members of the National Commodity and Derivatives Exchange (NCDEX) is the same. However, for new applicants a deposit of Rs 10 crore is required.

The processing fee for NCDEX and new applicants will be Rs 10,000, whereas a clearing member will have to pay Rs 10 lakh.

According to media reports, NSE will begin mock trading in currency futures next week. On August 7, the joint panel of the Reserve Bank of India and Sebi had decided to introduce currency futures in the stock exchanges, to manage the rupee’s volatility.

Indian residents are permitted to trade in futures. They would be allowed to purchase or sell currency futures for hedging their exposure to foreign exchange rate risk.

Currency futures is a forex derivatives contract to buy or sell one currency against other on a specified future date, at a price decided in the contract.

Addressing media persons at Sebi’s board meeting today, Bhave told that the regulator is considering all the applications, including the Multi-Commodity Exchange (MCX) and the Bombay Stock Exchange (BSE).

MCX has been asked to register the subsidiary company — that it has formed for currency futures — with Registrar of Companies.