NSE to launch F&O on S&P 500,DJIA

SEBI permitted introduction of derivatives on foreign indices in January 2011.

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The National Stock Exchange (NSE) is likely to launch futures contracts on benchmark US indices – S&P 500 and Dow Jones Industrial Average (DJIA) – in the near future,a senior exchange official said.

“We have received permission from the market regulator,Securities and Exchange Board of India (SEBI) to launch futures contract on S&P 500 and DJIA. Now we are awaiting for approval of options contract on S&P 500 from SEBI. We are looking at launching both futures and option contracts simultaneously,” NSE’s Senior Vice President R Sundararaman told reporters.

In March 2010,NSE signed a cross-listing agreement with the CME group,which gave it exclusive rights to launch futures contracts on S&P 500 and DJIA.

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The market regulator Securities and Exchange Board of India (SEBI) has permitted introduction of derivatives on foreign indices in January 2011.

Commenting on the rationale for introduction of these contracts,Sundararaman said,it will provide unique and first -of-a-kind way to gain unlimited and hassle-free exposure to the US market. There are no currency risk as the contracts are rupee dominated and it can be used as effective portfolio diversification and hedging tools.

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