Indian investors are set to gain access to the UK equity market for the first time through new rupee-denominated derivative contracts, following a deal between index provider FTSE Group and the National Stock Exchange of India (NSE).
FTSE will licence futures and options based on the FTSE 100 index and make them available for trading on the NSE from 3 May.
The new contracts will be tradable by all equity derivatives members of the NSE – enabling them to hedge and gain exposure to the top 100 constituent firms listed on the main market of the London Stock Exchange.
“The FTSE 100 Index will help Indian investors to diversify their portfolios further and have access to one of the world's widely tracked equity indices, whilst minimising currency risk,” said Ravi Narain, managing director and CEO of the NSE.
The FTSE 100 index accounts for over 80% of the UK's equity market capitalisation and forms the basis of various products, including over 30 exchange-traded fund listings
The NSE is the third largest exchange in the world by equity trading volume and the fifth largest derivatives exchange.
In September last year, the NSE along with rival exchange the Bombay Stock Exchange, each launched liquidity enhancement programmes for derivatives following an initiative from regulator the Securities and Exchange Board of India to encourage growth in this products.