The Securities and Exchange Board of India has permitted NSE and MCX-SX to launch interest rate futures. NSE will launch trading in this instrument on January 21 while MCX-SX will commence trading within this month. Both the exchanges will launch the product in their currency derivatives segment.
The instrument will be cash settled and would be used by banks, brokerage houses, insurance companies and Primary Dealers to manage interest rate risk.
Thomas Mathew T., Vice-Chairman, MCX-SX, said, “Development of the Interest Rate Derivatives market is an important step in placing the Indian markets on par with developed economies. We will soon take this segment live.”