Sebi nod for BSE & NSE for launching interest futures

FIIs & NRIs will be allowed to trade

To this effect, both the bourses have obtained approvals from the Securities and Exchange Board of India (Sebi) to launch their specialised derivative immediately, they said in a separate press releases here.

Further, the NSE has gone ahead and announced that it will launch IRF from August 31, while the BSE has chosen to launch it in the next eight to ten weeks in accordance with its proposed strategic alliance with United Stock Exchange (USE).  All the same, BSE asserts that it has the systems and processes ready for the launch of IRF immediately. 

According to the NSE, IRF contracts would be available to trade in its currency derivatives segment (CDS) and market timings for trading in the same would be from 9 am to 5 pm.  Aimed at encouraging active participation, NSE has exempted the transaction charge on IRF trades for the current calendar year.

No transaction charges
“It has been decided that no transaction charges will be levied on trades done in interest rate futures contracts up to December 31 2009,” the NSE added. Now that the NSE has announced its IRF launch date, plus its decision to levy no transaction charge up to the end of this calendar year, it should be able to derive the first mover advantage in the segment, say analysts.

Currently, only currency futures are traded on MCX Stock Exchange.  Unlike in the currency derivatives segment, foreign institutional investors (FIIs) and non-resident Indians (NRIs) would be allowed to trade in IRF. Also banks and corporate houses other than retailers and high networth individuals (HNIs) too would be allowed to trade in the segment.

It may be noted that a joint technical committee of the Reserve Bank of India and Sebi had in June this year recommended allowing interest rate derivatives based on 10-year government bond yields.