The Bombay Stock Exchange, (BSE), has commenced trading in interest rate futures on ten year Government of India (GoI) securities, following demand from investors and market participants.
Trading will be allowed in cash-settled, single bond futures. GoI bonds with a residual maturity of nine to ten years are eligible for trading. The Securities and Exchange Board of India (SEBI) has issued relevant guidelines under which trading will be conducted.
Reserve Bank of India executive director R. Gandhi said during the product launch ceremony that he would like to see the BSE offer standard basket based products in the near future, in addition to the new bond futures.
All currency and equity derivatives trading members of the exchange will be eligible to trade in the interest rate futures contract on the exchange, as well as banks, primary dealers, corporates and mutual funds. The first institutional trade was carried out by ICICI Bank and ICICI Securities Primary Dealership.
The minimum contract value for price trade has been set at INR 200,000, (approximately US$3,200). Monthly serial contracts are available for trading with a maximum maturity of three months expiring on the last Thursday of the expiry month, with the value date for settlement being the next working day.
The contracts are available via the new trading architecture of BSE trading system, called ‘BOLT Plus’, which is based on T7, the global trading architecture of Deutsche Borse.