The Bombay Stock Exchange (BSE) on Thursday signed a memorandum of understanding (MoU) with Japan’s Osaka Securities Exchange (OSE) with an aim to forge a partnership, including cross-licensing of each other’s indices.
OSE is Japan’s largest derivatives exchange and operates JASDAQ, the largest growth market in Japan. In 2010, the total trading volume of all derivative contracts on the exchange had hit a record high of 196,350,000 units.
“We believe the MoU with BSE, which is India’s largest stock exchange and has the well-known benchmark index Sensex, will be a significant step towards mutual cooperation of two exchanges,” said Michio Yoneda, president and CEO of Osaka Securities Exchange.
India’s leading stock exchanges are trying to expand the reach of their products by forging cross-listing alliance with global exchanges.
Madhu Kannan, MD and CEO of BSE, said: “This will help create a platform to facilitate wider investor access to world-class investment products from both exchanges, a move which will be mutually beneficial to the exchanges and investors alike.”
Futures and options (F&O) contracts on the Sensex, BSE’s benchmark index, are already available for trading on Eurex, Europe’s largest derivatives exchange. However, they haven’t taken off yet due to lack of active market makers.
BSE’s cross-town rival the National Stock Exchange (NSE) has an exclusive cross-listing arrangement with the CME group, which allows it to launch rupee-denominated futures contracts on the S&P 500 and the Dow Jones Industrial Average in India. CME had launched dollar-denominated E-Mini and E-Micro futures contracts on Nifty on the CME Globex electronic trading platform in July 2010.
NSE is also at an advance stage to sign a cross-listing agreement with the London Stock Exchange (LSE) group. This would allow NSE to launch F&O contracts on the FTSE 100 and LSE to launch options contracts on the Nifty.
SGX plans Nifty options
Singapore Exchange Ltd is planning to launch an options product linked to India-based National Stock Exchange’s main index, a senior executive said on Thursday.
The Nifty options product is waiting for approval from the Monetary Authority of Singapore, Janice Kan, senior vice-president of derivatives business at Singapore Exchange, said on the sidelines of a conference. She said the exchange expected to get approval in three-six months.
Kan added the exchange was also planning to later launch Bank Nifty and IT Nifty products, linked to NSE’s bank and information technology indexes.
