United Stock Exchange of India (USE) has become one of the first exchanges in the country to receive approval from the Securities and Exchange Board of India (SEBI) to commence operations in currency options. USE received the confirmation of the approval via a letter from the SEBI on Tuesday, October 12th 2010.
Reacting to the development, Mr. T.S Narayanasami, MD&CEO United Stock Exchange said, “We are extremely pleased and thankful to SEBI for giving us the approval to launch operations in this new segment. USE has received tremendous response from the market within a short period of time and we hope to further build the currency derivatives market by adding currency options to our product portfolio. This gesture on the part of SEBI will motivate us to perform better duly conforming to all the related guidelines in vogue.”
Mr. Madhu Kannan, MD and CEO Bombay Stock Exchange said, “Currency Options on USE hold the potential to change the business landscape in India. This product provides a very powerful mechanism for corporate entities and SMEs to hedge their currency risk and at the same time bringing in all the benefits of exchange traded products like transparency and efficient price discovery”.
USE will begin operations in currency options very soon in due compliance of all the guidelines lay down by SEBI. The options will be introduced on the USDINR spot rate with 3 In The Money, 3 Out of The Money and 1 Near The Money Option.
United Stock Exchange launched 3 weeks ago with operations in currency futures and on launch day itself created record volumes of Rs. 45,845 Cr.
About United Stock Exchange of India:
United Stock Exchange of India Limited (USE) is India’s newest stock exchange for currency derivatives. The exchange offers a better platform to corporates and SMEs for managing forex risk as spread rates in an exchange are better and it does not involve any counter party risk.
USE has a unique Public-Private partnership with equity participation by both PSUs and the private sector banks. All 21 Indian public sector banks have promoted United Stock Exchange by investing in equity which include Allahabad Bank, Andhra Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, IDBI Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab and Sind Bank, Punjab National Bank, State Bank of India, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India, Vijaya Bank. In addition to public sector banks, 5 private sector banks have also an equity participation in USE; they include Axis Bank, Federal Bank, HDFC Bank, ICICI Bank and J&K Bank.
Apart from banks, Jaypee Capital, MMTC and Indian Potash have also invested in United Stock Exchange to build an institution that is on its way to becoming an enduring symbol of India’s modern financial markets.
Bombay Stock Exchange is also a strategic partner with USE as it holds a 15% stake and all its members are connected to the new USE platform.
