United Stock Exchange to launch currency futures on August 31.

NEW DELHI: United Stock Exchange on Monday said it will start trading in currency futures on August 31.

"The exchange will start operations in all four currency pairs-- dollar-rupee, euro-rupee, yen-rupee, pound-rupee," the exchange said in a statement.

USE, backed by the Asia's oldest bourse the Bombay Stock Exchange, is already conducting mock trading in currency futures and full-fledged operations would be inaugurated by the Finance Minister Pranab Mukherjee.

"All our shareholders have committed for a minimum lock- in period of three years, highlighting their commitment towards the USE's vision, to develop the currency derivatives market in the country with a long term vision," United Stock Exchange MD and CEO TS Narayanaswami.

USE is promoted by 21 public sector banks, private banks and corporate houses. Its promoters include -- Allahabad Bank, Axis Bank, Canara Bank, HDFC Bank and Jaypee Capital.

The bourse got market regulator Sebi's nod for launching currency futures trading in March this year.

At present, currency futures contracts are allowed in the country in four foreign currencies against the Indian Rupee. The four foreign currencies are US Dollar, Pound Sterling, Japanese Yen and Euro.

Currency futures are transferable contracts that specify the price at which the currency can be bought or sold at a future date. Currency futures contracts allow investors to hedge against volatility in foreign exchange rates.

In August 2008, Sebi had given its approval for currency derivatives in the form of currency futures in India.

RBI and Sebi jointly regulate these products. While RBI approves the products, Sebi decides on the trading platforms.

Source : economictimes.indiatimes.com