EXCHANGE TRADE CURRENCY FUTURES BY MONTH END

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Exchange trade currency futures by month end
Economy Bureau
Posted online: Wednesday, August 06, 2008 at 22:17 hrs
Updated On: Wednesday, August 06, 2008 at 22:17 hrs


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The Securities & Exchange Board of India (Sebi) will launch a pilot alternative payment system for public issues by August-end, which would allow investors to keep the application money in their bank accounts till they are allotted shares.

"Hopefully by August end, we will start the pilot project," Sebi chairman CB Bhave told reporters at a seminar organised by the Financial Planning Standards Board India.

NOTE: BHAVE IS A RESPECTED PERSONALITY IN SEBI.

Further, the markets regulator is expected to launch the exchange trade currency futures by this month-end. So far three entities—NSE, MCX-promoter Financial Technologies and a consortium of HDFC, Kotak and SBI —have evinced interest in starting these products.

The pilot payment system would enable investors to earn interest income on their application money till the time of allotment, while sparing them from the hassles of getting refunds in case they are not allotted shares.

Bhave said the current system of payment through cheques and the alternate system would co-exist. Commenting on the pilot system, he said, "We really don't know how the system works. We need to get used to it. We have to sort out glitches if there are any in the beginning."

The alternate payment system, called additional mode of payment through applications supported by blocked amount, will exempt retail investors from making full advance fees. Instead, it would let them retain the in bank accounts till the completion of allotment. The system is dependent on 'Self Certified Syndicate Banks' (SCSB) that would accept the application of retail investors. Banks that wish to offer the ASBA facility must submit a certificate to Sebi for inclusion of its name in the SCSB list. Under the scheme, the SCSBs will block funds to the extent of the bid amount, upload the details in the electronic bidding system and then unblock funds of finalisation of allotment.

This mode of payment will apply only to public issues offered under the book building route and only those retail investors would be part of this payment process who bid at the cut-off price as the single option and agree not to revise their bids.

On exchange traded currency futures, Sebi chairman said that three entities have applied for launching these products. When asked about the specific timeframe for the launch of currency futures, Bhave said this was not in the regulator's hands as the three entities are in various stages of preparing software and setting up hardware for the...
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Comments
» Exchage traded Currency
Posted by Shyam.P.Kunte on 2008-08-06 09:26:54.130376+05:30
Another exchange is getting born here for speculators mostly of FIIs/Foreign Banks/Corporates to defraud gullible small investors.How come SEBI has forgotten the current MTM losses fiasco and really it is surprising.In a Trade deficit country like ours and with huge unwanted Forex reserves it will spell disaster in long term.May god save our Nation from those tricky financial gambling products.JaiHind

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