The National Stock Exchange (NSE) on Wednesday entered into a cross-listing agreement with Chicago Mercantile Exchange (CME) group, the world?s largest derivative exchange. The accord will enable Indian investors to take direct exposure to the US market.

Under the agreement, NSE will get exclusive rights in India to list and trade rupee-denominated futures contract in globally tracked equity indices like S&P 500 and Dow Jones Industrial Average (DJIA), subject to regulatory approval.

Similarly, the dollar-denominated futures contract on Nifty will be exclusively listed and traded on CME within Europe and the American region. This is the first time that futures contract in S&P 500 will be made accessible for investors outside the US market.

?India is an important part of our efforts to develop strategic partners in key growth markets,? said Craig Donohue, chief executive officer, CME Group, in a media release from Chicago. ?This is a big development since Indian investors will now be able to diversify their risk within India by taking exposure to the US market without actually having to invest in overseas currency,? said Ved Prakash Chaturvedi, CMD, Tata Mutual Fund, adding further that the risk-return profile of the US markets are very different from the domestic market.

He said these products will catch up with Indian investors over a period. Arindam Ghosh, CEO, Mirae Asset Global, however, has a word of caution, ?Sufficient research and knowledge should be made available on the companies constituting the S&P 500 and DJIA index for Indian retail investors to take a qualitative investment decision on these new overseas products? he said.

In an another separate MOU, NSE and Singapore Stock Exchange (SGX) on Wednesday also explored options for listing more India-linked equity products and other asset classes on SGX, including options contract on SGX Nifty futures. It already has a licensing agreement with SGX to allow trading of Nifty futures on SGX.

SGX has already obtained licensing rights from India Index Services and Products Ltd for listing CNX Nifty junior, CNX 100 and CNX mid cap index, subject to regulatory approval.

IISL is a joint venture between NSE and Crisil Ltd, which develops indices and index-related products and services for the capital market.