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Mumbai, Oct 6 The Financial Technologies-promoted MCX Stock Exchange (MCX SX) has received about 870 memberships, including 22 banks, for trading in currency futures which will go live from Tuesday.

The trading platform was inaugurated by Mr C.B. Bhave, Chairman, Securities and Exchange Board of India. The Reserve Bank of India Deputy Governor, Ms Shyamala Gopinath, was also present on the occasion. MCX SX is the third exchange to launch futures trading in currency after National Stock Exchange and Bombay Stock Exchange.

The currency futures on MCX-SX will initially be on USD-INR basis and each contract will be valid for 12 months from its launch on the exchange. The size of each contract will be US$1,000 and the contract will be quoted and settled in Indian rupees. The settlement price will be RBI’s reference rate. The market timings will be from 9.00 am to 5.00 pm Monday to Friday. Mr P.G. Kakodkar, Chairman, MCX-SX, said: “The increasing cross-border flow of capital across economies owing to globalisation has caused risk to travel subtly across markets. The development has heightened the need for an exchange for currency risk management and exchange rate discovery.”

According to the BIS (Bank for International Settlements) Triennial Survey on the global foreign exchange and derivatives market activity, the foreign exchange market in India has grown into the 16th largest market in the world in terms of total daily turnover, which was $34 billion in 2007. The OTC derivatives segment of the foreign exchange market in India increased significantly to register a daily average turnover of $24 billion, which makes it 17th largest among all countries. Mr Jignesh Shah, Vice-Chairman, MCX-SX, said, the strong research and domain expertise of MCX coupled with the new generation technology platform and a good mix of actual users amongst participants will give an edge in the currency derivatives market.

More Stories on : Forex | Commodity Exchanges

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