Five of the world's leading emerging market indices, will start to cross list their derivative indices from March 30, in a bid to expand their product offerings beyond their home markets.
The cross-listing of benchmark equity index derivatives is likely to facilitate liquidity growth in the BRICS markets and will considerably strengthen their international position.
The derivatives to be cross-listed includes Brazil's IBOVESPA futures; Russia's MICEX Index futures; India's Sensex Index futures; Hong Kong's Hang Seng Index futures and Hang Seng China Enterprises Index futures; and South Africa's FTSE/JSE Top40 futures, a joint statement said.
Further, JSE will also list options on the benchmark futures of the other four member exchanges.
The founding members of the BRICS Exchanges Alliance include BM&FBOVESPA from Brazil, Open Joint Stock Company MICEX-RTS from Russia, BSE Limited from India, Hong Kong Exchanges and Clearing Limited (HKEx) as the initial China representative, and JSE Limited from South Africa.
The alliance was formed on October 12, 2011, at a World Federation of Exchanges' conference in Johannesburg, South Africa.
The listing of benchmark equity index derivatives marks the implementation of the first phase of the alliance.
Under the second phase, the member exchanges plan to work together to develop new equity index related products representing the BRICS economies and cash market product offerings. The third phase may include product development and cooperation in additional asset classes and services.
Commenting on the development, Edemir Pinto BM&FBOVESPA CEO said "this is the first initiative in the world in which five exchanges cross-list their most important equity indices."
Ruben Aganbegyan, CEO at MICEX-RTS, said the listing would boost growth and also encourage the emerging market investor bases.
"For India", BSE CEO Madhu Kannan said "the first phase of the BRICS Exchange Alliance is an important step in the further internationalisation of our indices. Investors will have better access to member markets, helping them to diversify their portfolios."
HKEx Chief Executive Charles Li said the introduction of the BRICS exchanges¿ benchmark index futures to Hong Kong will diversify HKEx's product offerings, giving investors in Asian time zones easier access to the dynamic BRICS markets.
"Given the growing interest in BRICS markets, the JSE believes that the ability to offer investors exposure to these benchmark indices in local currency will enhance the offering of our exchange," JSE CEO Nicky Newton-King said.
Interest in the BRICS economies is prompted by above- average growth predicted for these regions as well as the rising consumer power generated by growing middle class in each nation.
