BSE to launch futures trading on Dubai bourse

Derivatives to trade on DGCX for over 16 hours a day

The Dubai Gold and Commodities Exchange will launch Sensex Futures from July 5, a derivatives contract on the thirty-stock Bombay Stock Exchange (BSE), which will be available for trading for more than two-thirds of the day.

The move is aimed at the non-resident Indians (NRIs) in the region, according to a statement from the BSE.

The contract will be traded for sixteen and a half hours, from 7:00 am to 11:30 pm local time or from 8:30 am to 1:00 am (the next day), in India. It will be traded in dollars and settled in cash. Expiry would be on the last Thursday of the month.

“Given that a large number of NRIs reside in the Middle East region, we are confident about the SENSEX futures contract’s potential to generate high interest and trade volumes in line with interest in other jurisdictions. We wish DGCX very best in this endeavour," said Ashishkumar Chauhan, Managing Director, BSE.

The exchange had entered into an agreement with DGCX for Sensex derivatives in October 17 2011.

This is the first time that the BSE partnered with an exchange in the MENA (Middle East and North Africa) region to launch an equity-based derivatives product, according to a statement from the exchange.

The Dubai Commodities Clearing Corporation (DCCC) will clear the trades on the contract.

Gary Anderson, chief executive officer of DGCX suggested that the move is part of a planned expansion in the emerging market space.

“While the retail segment is a key target market, we are also anticipating strong interest from a wide range of regional and international investors including UNHWIs, professional traders and institutional investors. DGCX participants have already shown great interest in trading SENSEX futures,” he said in a media statement.

DGCX’s new equity futures contract will target retail participants including non-resident Indians (NRIs) across the world, existing DGCX members focused on retail offerings, the NRI desks of banks, professional traders trading and arbitraging Indian markets offshore and large foreign institutional investors seeking exposure to Indian equity markets, according to the exchange statement.

The exchange has put in place a market-making mechanism to provide liquidity to the contract, it added.