MCX Stock Exchange (MCX-SX) has entered in to a commercial agreement with FTSE, one of the leading global index providers, which will bring a range of international as well as new domestic indices to the Indian market. FTSE group which is jointly owned by the FT Group and London Stock Exchange (LSE) is a world leader in the creation and management of indexes.
According to the terms of the agreement, MCX-SX and FTSE will work together to create new domestic index products for India besides bringing a set of international FTSE indices to MCX-SX that will facilitate the creation of international investment products to be listed on the MCX-SX in India subject to regulatory approval.
The agreement also marks the beginning of FTSEs foray in to the Indian equity market. ?This is our first step in establishing our business in India which is a growing market?, said Donald Keith, Deputy Chief Executive- FTSE Group. On the partnership with MCX-SX he said ?It is important to get right partner that will help in building a strong foundation for business growth over a longer period of time?.
?To achieve the objective of financial inclusion and expand investor base we should have products beyond equity. There should be multiple index that would cater to multiple investors for hedging and other activities?, said Jignesh Shah, vice-chairman, MCX?SX.
However he added that initially they would be coming out with India dedicated indices and MCX?SX will be used as the delivery platform for investors.
These index series could be used as performance benchmark and as a basis for financial products such as institutional and retail funds, exchange traded funds and derivative contracts. The indices which will be developed according to
globally benchmarked standards is expected attract volume to MCX?SX which is yet to offer trading in equity products and is awaiting regulatory approval.
Under the agreement, FTSE will also extend the cooperation for index development to other domestic and international exchanges promoted by Financial Technologies like Multi Commodity Exchange of India Ltd (MCX), Singapore Mercantile Exchange, Bahrain Financial Exchange subject to respective regulatory approvals.
On a question whether this agreement would lead to FTSE picking up stake in MCX?SX, Shah said, ?There is no such proposal at this point of time.?