Currency futures likely by August-end

New Delhi: Three entities have so far evinced interest in launching exchange-traded currency futures, that are likely to be put in place by this month-end to enable investors to manage volatility in the currency markets.
"As you know we have issued guidelines for currency futures.

Three entities have applied for it," SEBI Chairman C B Bhave told reporters on the sidelines of a seminar organised by Financial Planning Standards Board India here.

Though Bhave did not mention the names of entities, sources said they are NSE, MCX-promoter Financial Technologies and a consortium of HDFC, Kotak and SBI.

When asked about the specific timeframe for the launch of currency futures, Bhave said this was not in SEBI's hands as the three entities are in various stages of preparing software and setting up hardware for the purpose.
However, a key Finance Ministry source said it would likely to be operational by this month-end.

A couple of months back, Bhave had said the attempt of SEBI and RBI is to create exchange-traded currency futures as they are far easier to be regulated and far easier to contain risks than over-the-counter (OTC) market.

According to an RBI-SEBI panel's report on currency futures, exchange traded futures as compared to OTC forwards serve the same economic purpose, yet differ in fundamental ways.