BSE International Exchange to start single future trading from Friday

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Bombay Stock Exchange’s International Exchange will commence single futures and options trading from Friday, April 28. The international exchange will trade single futures and options in 10 stocks following approval from the Securities and Exchanges board of India (Sebi).

The BSE International Exchange, which is at GIFT City in Gandhinagar, will start with these companies: Tata Motors, Axis Bank, ICICI Bank, HDFC Bank, L&T, Infosys, Tata Consultancy Services, State Bank of India, Maruti Suzuki and Reliance Industries. Futures and options of these companies are already trading on the Dubai Gold and Commodity Exchange (DGCX).

A source close to development told Moneycontrol, "BSE International Exchange has applied for approval for more than 44 products, including base metal products and crude oil, which are still pending. However, the exchange is hopeful that in the next two to three months these products will also be trading on the international exchange."

Another source said, "Sebi has sought a view from the Petroleum Ministry on crude oil trading at international exchange. Earlier the Chairman wrote to the petroleum ministry for taking their view on crude oil trading at GIFT city." He added that the Finance Ministry and the Petroleum Ministry were in touch on the matter.

As of now, only the Bombay Stock Exchange has started operating an exchange in GIFT City, a pet project of Prime Minister Narendra Modi. The National Stock Exchange (NSE) is awaiting regulatory approvals. Sebi has done two rounds of audit of the NSE for the approvals, and a third source told Moneycontrol that the exchange may get the nod in the first week of May.

"In the international financial centre, there are incentives in tax measures. There will be no commodities and securities transaction taxes, which are major costs," said a source, adding that a lot of domestic hedgers – essentially consumers of metals -- had shown keen interest due to zero transaction tax on commodities.

At the GIFT City, rules allow traders to use the same margin money across all segments, whether it is debt, equity, commodities or currency.

Market experts expect the volume in currency segment to be the highest, followed by commodities and equities.

(Disclosure: Reliance Jio is a part of Reliance Industries that owns Network 18 Media & moneycontrol.com)