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Bombay Stock Exchange launches cross-currency derivatives and cross INR options

Mumbai, Feb 22: The Bombay Stock Exchange (BSE) has received the approval from Securities and Exchange Board of India (SEBI) for introducing cross-currency derivatives (future and options) on pairs such as Euro (EUR) - US Dollar (USD), Pound Sterling (GBP) - USD and USD - Japanese Yen (JPY).

The exchange also gained permission to introduce option on EUR-INR.

GBP-INR and JPY-INR in addition to existing USD-INR options, the Bombay Stock Exchange said in a statement.

In addition to this, the authority has also permitted trading in cross-currency derivatives agreements for an extended period between 9:00 a.m. and 7:30 p.m.

At present, futures agreements are available only for currency pairs that have the rupee as one leg and an options contract for only a single currency pair - dollar/rupee - is available.

For futures contracts in cross-currencies, 12 standardized monthly contracts will be made accessible to investors and the agreements will be paid in cash (rupees).

In options contracts, three serial monthly agreements succeeded by three quarterly contracts will be launched.

The end trading day for the contracts shall be two working days earlier to the last working day of the expiry month at 12:30 p.m. and the closing settlement price of the cross-currency derivatives contracts shall be calculated using the Reserve Bank of India (RBI) reference rate for USD - INR and the identical exchange rate published by RBI for EUR-INR, GBP-INR and JPY-INR, as appropriate, on the last trading day of the agreement.

MD and CEO, BSE, Ashishkumar Chauhan said, "the introduction of new products will allow entities like corporates, foreign portfolio investors and non-resident Indians to participate and to take positions in the exchange-traded currency derivatives markets. Besides, a longer trading session will enable market participants to capture key global events in pricing which they otherwise lose out."

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