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Bombay Stock Exchange Limited (BSE), today decided to take a 15% stake in United Stock Exchange (USE). USE, which will operate as a BSE Group Company, now brings together a consortium of key stakeholders - the exchange, banks, financial institutions - to drive the development and growth of the currency and interest rate derivatives markets.
Currency futures have been trading actively for the past year, however the market is still at a very nascent stage. USE’s efforts will be focused on increasing the participants in this market, as well as the liquidity and the range of tradable products.
With prior regulatory approval, USE will also launch interest rate futures. Interest rates touch every economic agent, from the largest financial institution to a family with a home loan. New products are expected to be launched in the coming years to help market participants manage their interest rate risks. USE will provide an advanced trading platform for these products and will be an important driver of innovation in terms of product and market development.
Commenting on the development, Mr. Jagdish Capoor, Chairman, BSE, said, “Events in recent years have demonstrated the desirability of exchange traded products. We at BSE are committed to working with regulators and market participants to forge the development of trading platforms that facilitate price discovery in a transparent manner. We are happy to be joining hands with the largest banks, end-users and trading entities to drive development of this market.”
Mr. T S Narayanasami, Managing Director & CEO, USE added “By partnering with India’s premier exchange, we will significantly strengthen our offering and broaden our reach. BSE has an established regulatory structure, and strong distribution and exchange technology that will help us accelerate our plans to be a dominant player in the currency and interest rate derivatives market in India.”
“BSE’s commitment to thought-leadership, innovation and our belief in the consortium model as a powerful approach for long-term market development were the key factors to enter into this relationship. The BSE Group will work with all the different constituents to drive product and market development in currency and interest rate derivatives markets,” said Mr. Madhu Kannan, Managing Director & CEO, BSE Ltd.
