NMCE to enter currency futures trading, to rope in PSBs as co-promoters

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After MCX, NSE and BSE, it’s now the turn of National Multi Commodity Exchange (NMCE) to enter into the currency futures derivatives trading.

The exchange has applied to the registrar of companies (RoC) for establishing a company to set an exchange for trading in currency futures derivatives. “We have applied to the RoC for setting up a company for trading in currency futures derivatives,” said Sudip Bandopadhyay, director of NMCE.

Bandopadhyay was inducted into the board of governors of NMCE after Reliance Money bought 26% stake in the exchange for around Rs 50 crore to Rs 100 crore.

The exchange is also talking to a number of state-run banks for acting as co-promoters in the new company to trade in currency futures.

“The new company will be jointly promoted by NMCE and Reliance Money and will also have a clutch of banks as other promoters,” Bandopadhyay added. Sources said the new exchange was likely to be called as National Currency Exchange of India, or National Currency Derivatives Exchange of India or Currency Derivatives Exchange of India.

“We have applied to the RoC for clearing any one of the three names for the new exchange,” Bandopadhyay added.

He said the NMCE would soon incorporate the company and then seek an approval by the Securities and Exchange Board of India (Sebi) for launching currency futures as required by the law.

Recently, India’s largest commodity exchange MCX also expressed its intention to launch futures in currency derivatives. It is currently in the process of forming a company to start currency futures.

NSE and BSE are also in the process of seeking necessary approvals for starting currency futures. If approved, this would be NMCE second big move in the last couple of months.

It had recently announced the setting up of a spot exchange called the National Agriculture Produce Marketing Committee jointly in association with Gujarat Niyantrit Bazar Sangh, an apex body of more than 200 mandis as a co-promoter.

Earlier, On August 7, a joint panel of the Reserve Bank of

India and Sebi had decided to introduce currency futures in the stock exchanges, to manage the rupee’s volatility.

Indian residents are permitted to trade in futures. They would be allowed to purchase or sell currency futures for hedging their exposure to foreign exchange rate risk.