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Several months of uncertainty, compounded by turf battles between RBI and Sebi, and a RBI-Sebi technical committee’s report in May, preceded the announcement that currency derivatives will be allowed. Not that currency futures weren’t allowed earlier, but they were limited to a few banks in Mumbai. The restriction to dollar-rupee contracts alone remains, but standardised currency futures will be permitted through stock exchanges. RBI has indicated requirements for banks to become trading and clearing members of the currency futures market and Sebi has issued some guidelines, with more to follow. For instance, membership to the currency futures market will be separate from membership to equity derivative or cash markets. NSE, BSE (through promoter Financial Technologies), and a consortium of HDFC, Kotak and SBI have evinced interest in establishing currency-derivatives trading platforms. A roll-out won’t be immediate, since hardware and software issues have to be sorted out and more Sebi guidelines are awaited. There are reasons to welcome the reform. First, over-the-counter transactions (such as through banks) were limited in scope and geographical spread. Exposure to currency risk isn’t limited to Mumbai, nor to entities that have trading links alone. The market cannot be broadened without involving exchanges.