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Shashi Ashiwal

Mr Rajnikant Patel, MD & CEO, Bombay Stock Exchange, and Mr Kevin Davis, Chairman, US Futures Exchange, at a press conference in Mumbai. —

Our Bureau

Mumbai, Nov 12

The Bombay Stock Exchange on Monday signed an agreement with US Futures Exchange (USFE) licensing the benchmark index Sensex for US futures listing.

The US dollar denominated futures trading in the BSE-benchmark index Sensex will begin from February 22, 2008.

USFE’s agreement to license the Sensex from BSE is an exclusive one. However, neither party would disclose the terms of the licensing contract.

The US investors can directly participate in India’s equity market, without requiring American Depository Receipt (ADR) authorisation.

“The launch of a futures contract based on the Sensex will facilitate overseas investors to take exposure to Indian equities”, said Mr Rajnikant Patel, Managing Director & CEO of BSE.

USFE’s US dollar denominated Sensex futures contract will trade 23 hours per day and settle monthly to the corresponding value of BSE’s futures contract.

The Sensex contract will have “a notional value of 40,000 and a tick size of $5”.

The clearing will be done through the Chicago Clearing Co-operation.

“It seems that the BSE wants to bring in more liquidity in the BSE futures and options segment and this agreement is a step in that direction,” said a Head-Research of a Mumbai based brokerage house.

“Also this signals more investment coming into India,” he added.

The futures contracts of NSE’s benchmark Nifty are traded in Singapore and Hong Kong exchanges.

“USFE’s listing of the Sensex index will provide US market participants with direct access to pure Indian equities exposure through existing futures accounts,” said Mr Satish Nandapurkar, CEO of USFE.

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