Framework for interest rate derivatives market to be ready in Q1'09

Jaipur, Nov 21 (UNI) National Stock Exchange (NSE) Managing Director and CEO Ravi Narayan today said the framework for interest rate derivatives market will be finalised by the first quarter of next year.

''The framework for the interest rate derivative trading, which is now under the regulatory approval, is expected to be finalised by the first quarter of 2009,'' Mr Narayan told reporters here on the sidelines of a conference organised by the ICAI.

NSE gauging the market requirements initiated the process of setting up derivative markets in the country.

The NSE Chief also said the currency futures trading, which was launched in last month for the US dollar, will be started in next six months in other currencies such as Yen and Pound.

The stock exchange is also seeking approval for foreign companies to participate in the currency futures trading. At present, only domestic companies can do so.

''We will start trading in other currencies in next six months.

It will basically be in the currencies of the countries with which we have sound trading relations...It will include Yen and Sterling pound,'' he added.

He said the stock exchange is working closely with the Reserve Bank of India (RBI) to bring electronic transfer of funds.

On Small and Medium Enterprises (SMEs) wanting to list at bourse; Mr Narayan said the market regulator SEBI is looking into the matter and the market is not finalised for it yet.

Earlier this year, NSE proposed new guidelines for the listing of small and medium enterprises. It proposed an alternative market segment, to be known as SMEx, to enable them raise expansion capital.

On global meltdown, he said the impact has been very little on the Indian economy and it can gain from the crisis in future.

''We will see momentum of growth and fund flow to Asia, especially to India and China after a short period of time. The crisis will prove profitable for us, hopefully,'' he added.

Commenting on the downward trends in Indian bourses, Mr Narayan said it has nothing much to do with the rate cuts, but it is mainly because of the fears of global recession.

''We hope to see six-time increase in investors population in near future,'' Mr Narayan said.

He, however, emphasised on high corporate governance to attract investment.

Mr Narayan said the risk assessment is not real, but it is based on perception. ''Real risk assessment is possible once the dust (of global recession) settles,'' he said, adding that right now, fund flow in the market is being ruled by fear.

He cited interest rate volatility and currency volatility as the main reasons impacting corporate profitability.

UNI SG SBA PK BD1445