"As you know we have issued guidelines for currency futures. Three entities have applied for it," SEBI chairman C.B. Bhave told reporters on the sidelines of a seminar organised by Financial Planning Standards Board India here.
Though Bhave did not mention the names of entities, sources said they are NSE, MCX-promoter Financial Technologies and a consortium of HDFC, Kotak and SBI.
When asked about the specific timeframe for the launch of currency futures, Bhave said this was not in SEBI's hands as the three entities are in various stages of preparing software and setting up hardware for the purpose.
However, a key finance ministry source said it would likely to be operational by this month-end. A couple of months back, Bhave had said the attempt of SEBI and RBI was to create exchange-traded currency futures as they are far easier to be regulated and far easier to contain risks than over-the-counter (OTC) market.
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By Mr Chitranjan, Section News
Posted on Wed Aug 06, 2008 at 12:52:23 AM EST
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An individual entering into a forward contract agrees to transact at a price on a future date. On the maturity date, the obligation of the individual equals the forward price at which the contract was executed. Except on the maturity date, no money changes hands.
On the other hand, in the case of an exchange-traded futures contract, mark-to-market obligations are settled on a daily basis. Since the profits or losses in the futures market are collected and paid on a daily basis, the scope of building up of mark-to-market losses in the books of various participants gets limited.
The RBI-SEBI panel had earlier suggested introduction of currency futures markets, initially for dollar-rupee contract
Source: PTI 06/Aug/2008
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