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Mr.Joseph Massey

M.R. Subramani

Chennai, Aug 15 MCX will be able to launch currency futures in two weeks time from the date it receives the final clearance, even as it plans to launch futures in arecanut. Besides, it has got its team and infrastructure ready to launch its commodity exchange in Singapore.

“The software for currency futures is ready. The infrastructure team is also ready. We are now educating our members. But we are awaiting first the clearance of the Securities and Exchange Bureau of India and then the Reserve Bank of India to launch the currency futures,” said Mr Joseph Massey, Managing Director and Chief Executive Officer, MCX.

On Wednesday, the SEBI Chairman, Mr C.B. Bhave, said applications for floating exchange-traded currency futures had been received from MCX, BSE and NSE.

“Once we get the approval, we can start registration of members. Those who carry currency exposure will normally look to take part in these derivatives,” he said.

Stating that international trade in commodities covered currencies, Mr Massey said currencies have grown around commodity markets worldwide. “We can offer our products to service firms, including software companies. Even banks can cover their risks,” he said.

The physical currency market’s turnover was $10 trillion a year and it was a big market. “Currency futures can do the same thing as the commodities market in two years’ time. Currently, the currencies are traded on over-the-table counters and through inter-bank transactions. But futures exchange can bring in real transparency and standardise the currency market. Actual users have the electronic screens all over the nation and they can make use of it for risk management,” Mr Massey said.

On the Singapore venture, he said infrastructure and team were ready and MCX would launch it soon. To a question on the products that would be offered, he said: “We can’t disclose it now. There is a large chunk and we are chopping it.”

“We recently launched coriander, aviation turbine fuel, certified emission reduction futures and soon, we will launch arecanut futures,” Mr Massey said.

MCX is awaiting changes to the Forward Contracts (Regulation) Act, 1952 to introduce contracts such as weather and freight indices besides MCX Comdex indices. “The freight indices may happen independently also. The MCX Comdex will have select commodities among metals, energy and agriculture,” he said.

Stating that MCX was clocking a daily turnover of Rs 20,000 crore, Mr Massey said the Centre should take an integrated view of the market that would be tailor-made for all players.

To a question on MCX’s initial public offer, Mr Massey said it had to be deferred following the merchant banker’s advice since the market conditions were not found conducive.

More Stories on : Forex | Commodity Exchanges | Commodities | Derivatives Markets

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