The Securities and Exchange Board of India (Sebi) is mulling the introduction of rupee-euro and rupee-yen contracts in currency futures soon. Currently, only rupee-dollar contracts are allowed for trading in currency futures.
Sebi is in the process of studying the market for rupee-yen and rupee-euro and the contracts would be launched after considering the outcome of the study, said Sebi Chairman C B Bhave on the sidelines of a press conference in Kolkata on Tuesday. He also said the market regulator would be launching interest rate futures within the next five months.
The committee, which had looked into currency futures, would be studying the possibility of interest rate futures and would set the norms and guidelines. “Work on currency futures began in the first week of March and they were finally rolled out in August. We hope the next phase would be quicker,” said Bhave.
When asked if foreign institutional investors (FIIs) and non-resident Indian (NRI) investors would be allowed to invest in currency futures, Bhave said there was a lot of demand, but added that it would take time to decide on the matter as currency futures have just begun.
On the Application Supported by Blocked Amount (ASBA) mechanism in initial public offers (IPOs), a pilot project will be rolled out September 8, he said. Bhave added that Sebi had spoken to five banks — ICICI Bank, Union Bank of India, HDFC, State Bank of India and Corporation Bank — which will spearhead the project. Vadodara-based 20 Microns will be the first company to carry out its IPO through the SEBI guidelines on ASBA.
On the issue of an SME exchange, Bhave said Sebi would soon finalise the terms, on which the SME exchange would be set up based on the feedback and analyses. Bhave said there was a need for quicker launch of cross-regulatory products to provide benefit to small companies and investors to get a hedge against risks.