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Our Bureau

Mumbai, Oct 4 MCX Stock Exchange (MCX-SX) will start currency futures trading from Tuesday. MCX-SX will be the third stock exchange after National Stock Exchange and Bombay Stock Exchange to launch futures trading in currency.

The Securities Exchange Board of India (SEBI) Chairman, Mr C.B. Bhave, will inaugurate “Currency Derivatives at MCX-SX” at a function to be attended by the Reserve Bank of India Deputy Governor, Ms Shyamala Gopinath, on Monday.

Expressing confidence to score over rivals despite late entry into the market, Mr Joseph Massey, Managing Director, MCX-SX, said contract specification for all the exchanges has been defined by the RBI, “but we have a business strategy to capture the market in place”.

MCX-SX received in-principal approval to launch currency futures in August and commenced mock-trading on September 2. It registered a turnover of Rs 125 crore with 30 members participating in the mock trading of currency futures on day one.

To start with, MCX-SX would trade currency futures on dollar-Indian rupee ($-INR) and launch more currency pairs subsequently with prior regulatory approval. The contract size of the currency futures contract is $1,000. The contracts shall be settled in cash in Indian rupees and each contract will have a 12 months maturity period.

“This segment will enable importers, exporters, investors, corporations and banks to hedge their currency risks at low transaction costs and with greater transparency and safety,” MCX Stock Exchange said.

It said with a large number of banks, corporate and brokerage houses as trading members, MCX SX will provide the desired liquidity and depth for all categories of users. Further, MCX SX will guarantee settlement of all transactions which will enhance safety by eliminating counterparty risk.

Besides large users, MCX SX will benefit small and medium enterprises (SMEs) and resident Indians.

More Stories on : Derivatives Markets | Forex | Commodity Exchanges

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