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Paul Noronha

The Chairman of SEBI, Mr C.B. Bhave, strikes the gong to launch the BSE currency derivatives segment (BSE-CDX) on Wednesday. Next to him is Ms Shyamala Gopinath, Deputy Governor of RBI. —

Our Bureau

Mumbai, Oct. 1 The financial regulators are likely to consider the demand of traders to raise the daily currency futures limit of $5 million, said the SEBI Chairman, Mr C.B. Bhave.

He was speaking after the launch of currency futures trading on the Bombay Stock Exchange on Wednesday.

Currently, individual participants have a daily position limit of $5 million, which is proving to be a hurdle for those with large foreign currency requirements such as banks, corporations, exporters and importers.

“Already people have started demanding that the restrictions that have been put on currency derivatives should be relaxed,” said Mr Bhave. Their request will receive the full attention of SEBI as well as RBI, he said.

On day one of currency futures trade on BSE, 65,686 contracts valued Rs 307 crore were traded as compared to 89,267 contracts worth Rs 419 crore executed on NSE.

Currency futures were first launched on the National Stock Exchange on August 29.

MCX Stock Exchange, a subsidiary of Multi Commodity Exchange of India Ltd has also received SEBI approval for currency futures trading.

On the margin requirement for the traders, the SEBI Chairman said that in no circumstances would the principles of settlement and of transparency be compromised. “There might be temptations to make a few adjustments… but between the exchanges you are not going to compete in the area of giving people little bit of latitude on margins and things like that which affect the sanctity of settlement.”

BSE’s newly appointed CEO, Mr M.L. Soneji, said the exchange was working out an arrangement with Deutsche Borse to shore up the derivatives segment on BSE where volumes are currently negligible.

“The exchange was also working on arrangements with another foreign partner, Singapore Stock Exchange, so that indices and other products can also be availed of by NRIs and others who want to invest in India as an emerging market,” said Mr Soneji.

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