The agreement is expected to further develop derivatives markets in India and South Korea.
Besides, it will encourage the sharing of information, and foster new opportunities for the exchanges and their respective issuers.
In a statement, BSE said it has "entered into a Memorandum of Understanding (MoU) with the Korea Exchange (KRX) in Seoul to extend their cooperation by listing S&P BSE Sensex based derivatives contracts."
"I expect that the listing will facilitate better price discovery and create arbitrage opportunities because the two markets have overlapping time zones," Korea Exchange Chairman and CEO Kyungsoo Choi said.
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The two exchanges will also support each other for investor relations activities of cross-listed products and assist with cross-border supervision and enforcement.
BSE and KRX have also agreed to conduct joint research in the area of derivatives markets and to support the development of new products, experience sharing and cooperation on IT system.
"The MoU between BSE and KRX represents a significant step in integrating two of the fastest growing economies of the world, India and South Korea ...We are sure this integration will go a long way in building both our expertise-financially and technologically," BSE Managing Director and Chief Executive Ashishkumar Chauhan said.