In a bid to broad-base the currency derivatives market, capital market regulator Securities and Exchange Board of India (Sebi) is looking at including more market participants in forex futures trading.
“There are some restrictions in this market on who can trade and we are now looking at if these restrictions can be relaxed,” said Sebi Chairman C B Bhave.
Currently, foreign institutional investors (FIIs) and non-resident Indians (NRIs) are not allowed to trade in currency futures.
Bhave further said that the joint committee of the Reserve Bank of India (RBI) and Sebi would first look at expanding the reach of the market and then work for including different currencies. “Now, there is only rupee-dollar futures with only certain players being allowed to participate,” Bhave said, adding that the committee was looking at whether this market needed to be expanded.
“Our understanding is that even in forward markets… the trade is dominated by rupee-dollar,” he said.
Bhave was speaking on the sidelines of a conference organised by the National Institute of Securities Markets (NISM) in Mumbai.
Sebi would also look into the recommendations made by the Mutual Funds Advisory Committee after inviting public comments, Bhave said. On December 4, Sebi in consultation with the Association of Mutual Funds in India (Amfi) had revised norms for close-ended funds in order to prevent a recurrence of the massive redemption faced by mutual funds in October.
Further, the regulator also said that the decision to open futures and options (F&O) trades in the National Stock Exchange’s (NSE’s) Nifty from 8 am was a decision between the exchange and market participants. The NSE has applied to Sebi to be allowed to open F&O trades at 8 am. NSE MD Ravi Narain, who was also present at the conference, said the exchange would wait for Sebi approval.
Source : Business Standard