Investment Banking

Investment Banking

Features of Interest Rate Futures

Standardized Interest Rate Futures contract shall have the following features:

The contract shall be on 10-year notional coupon bearing Government of India security.

The notional coupon shall be 7% per annum with semi-annual compounding.

The contract shall be settled by physical delivery of deliverable grade securities using the electronic book entry system of the existing Depositories, namely, National Securities Depositories Ltd. and Central Depository Services (India) Ltd. and Public Debt Office of the Reserve Bank.

Deliverable grade securities shall comprise GoI securities maturing at least 7.5 years but not more than 15 years from the first day of the delivery month with a minimum total outstanding stock of Rs 10,000 crore.

Currency futures are standardized foreign exchange derivative contracts traded on a stock exchange to buy or sell one currency against another on a specified future date, at a price specified on the date of contract, but does not include a forward contract.

 Currency futures in India:

 A currency future trading was started in Mumbai August 29, 2008.

 With over 300 trading members including 11 banks registered in this segment, the first day saw a very lively counter, with nearly 70,000 contracts being traded.

 The first trade on the NSE was by East