Futures specialists have welcomed an Indian government report that proposes letting foreign firms trade the country’s currency futures and options – one of the fastest growing parts of the world’s listed derivatives markets this year.
The findings were published this week by the Department of Economic Affairs and Ministry of Finance’s working group on foreign investment. They concluded that present legislation, which only allows foreign institutional investors to trade forward currency derivatives over-the-counter and not on exchanges was “hard to justify”.
“The regulation of futures, forwards and options should be harmonised,” the group said. “The present arrangement, where foreign investors support the non-transparent currency forward market and are blocked from using the transparent currency futures market, is an anomaly. The government [should] encourage greater trade in exchange-traded in...