Saturday, September 25, 2010

Milestone of India - United Stock Exchange begins operations.

MUMBAI: New bourse for currency derivatives, the United Stock Exchange of India (USE), began operations on Monday and witnessed good volumes in the first hour of trade.

After the NSE and MCX, the USE is the third bourse offering currency trading in the country. “We are witnessing good volumes and it (volumes) has already crossed Rs.2,000 crore in the first hour of trading,” USE Director Gaurav Arora told reporters after the launch.

The exchange commenced operations in the all four currency pairs allowed by SEBI — dollar-rupee, euro-rupee, yen-rupee and pound-rupee.

Worldwide, the currency derivatives market was bigger than equities with volumes of $3-billion-a-day while India's contribution is only one per cent. Hence, there was a greater prospect for growth, USE CEO T. S. Narayansami said.

Reserve Bank of India Deputy Governor Shyamala Gopinath, who, along with SEBI Chairman C. B. Bhave, inaugurated the bourse, said investors should start looking at currency trading as a new asset class.

The RBI and SEBI came out strongly in support of having a diversified ownership in exchanges for ensuring good governance of the “systemically important institutions.”

“A diversified ownership is very necessary in a market infrastructure company. Ultimately, exchanges are public utilities. (It) is a means of good governance,” Ms. Gopinath said at the inauguration of the USE here. Endorsing her views, SEBI Chief said, “I am happy that USE is coming with a diversified ownership...we need to see that they serve the purpose that they are supposed to serve.”

Public-private partnership

USE is a unique public-private partnership with 21 public sector banks, five top private banks, the BSE, trading companies like the state-owned trading entity MMTC, Jaypee Capital, gold importer Riddhi Siddhi and a leading garment exporter as stakeholders. — PTI

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