Markets regulator Sebi plans to engage with leading stock exchange BSE to explore avenues for increasing the F&O (futures and options) trade volume on its platform.
Taking note of the low F&O volumes at the BSE, the board of Sebi has suggested the regulator to engage with the exchange to “explore ways for increasing the volume”.
The suggestion was made at Sebi’s board meeting here last month and the regulator is accordingly looking at ways to engage with the BSE in this regard, a senior regulatory official said.
When contacted, BSE declined to comment on the matter.
The suggestion came after Sebi presented before its Board a Status Report on developments in the derivatives market.
Sebi presents a quarterly report before its Board on developments in this market and the latest update was given to the Board for the period of October 2015 to January 2016.
The total turnover in equity derivatives segments across the three exchanges – NSE, BSE and MSEI – during this period was Rs 199 lakh crore. Options constituted 80.61 per cent of the total turnover during the period under review, while futures constituted 19.39 per cent of the total turnover.
Turnover in the equity derivatives segment was 12.75 times the turnover in the cash market during this period.
Of the total turnover in equity derivatives segments across the three bourses, NSE had a whopping market share of 96.58 per cent while BSE accounted for 3.42 per cent of the total turnover. Trading in equity derivatives segment of MSEI was nil during this period.
As per Sebi’s status report, the total of average daily turnover (collective figure for index futures, stock futures, index options and stock options) stood at Rs 2,37,492 crore, while the same for the BSE was Rs 8,402 crore for the period.
The turnover in the equity derivatives segment was 14.49 times of the turnover in the cash market at NSE, while this multiple was 2.91 times in case of BSE.
It was observed that, at NSE, proprietary trading by trading members accounted for 48.40 per cent of the total turnover, followed by clients and FPIs at 38.94 per cent and 12.66 per cent, respectively.
On BSE, proprietary trading accounted for 59.23 per cent of the total turnover, 40.77 per cent of trading was contributed by clients.
In the currency derivatives segment, NSE had a total market share of 61.14 per cent in USD-INR Futures and Options, followed by BSE at 35.87 per cent and MSEI at 2.99 per cent.
Trading in the exchange traded currency derivatives segment was concentrated in USD-INR Futures and Options.
The total turnover (NSE, BSE and MSEI combined) in the Interest Rate Futures (IRF) contracts during October 2015 to January 2016 was Rs 2.25 lakh crore.
NSE accounted for 72.70 per cent of the total turnover, BSE accounted for 24.53 per cent and MSEI accounted for 2.77 per cent.
