Currency futures: NSE gets nod; MCX, BSE to wait

However, the Multi-Commodity Exchange MCX which had applied for the regulator8217;s permission to start currency derivatives trading will have to wait. It will have to promote a separate exchange and get the regulator8217;s approval.

Sebi said that the BSE had yet to reach the stage where it could be given the approval for currency futures trading and highlighted regulatory issues in MCX8217;s application. 8220;There are some regulatory issues involved in the exchange we are promoting on which currency futures will be traded. The name of the exchange, which will be a subsidiary of MCX, has not been finalised yet,8221; said MCX managing director Joseph Massey.

Currency futures allow corporates to exchange one currency for another say the rupee against the dollar at a pre-determined rate for delivery on a specified future date. The settlement rate for the planned exchange-traded currencies will be a reference rate fixed by RBI at the end of each month.