Sensex Futures approved for sale in the US
21 Jun 2006
The Commodity Futures Trading Commission (CFTC) of the US has approved the sale of futures contracts based on the 30-share BSE Sensex in the US. The CFTC issued a no-action letter yesterday to allow such transactions in Sensex futures.
'If
a futures contract has been the subject of such a no-action
letter, the option on that particular contract may also
be offered or sold in the United States, without any further
regulatory action', the CFTC communication said.
With the CFTC approval, futures and options products based on the Sensex can be launched by US based exchanges. US investors and traders interested in the Indian markets can trade directly in such contracts without going through an investment fund. Futures contracts based on the S&P CNX Nifty index were approved by the CFTC earlier.
Trading in futures and options based on emerging market indices are not yet popular in the US. However, futures contracts on leading stock market indices in Europe and Japan are very popular and attract significant volume. Large exchanges like the Chicago Mercantile Exchange (CME) have futures products based on overseas stocks indices like the Japanese Nikkei.
The
30-share BSE Sensitive Index or Sensex is the most widely
tracked Indian stock market index. Though the 50-share
Nifty index of National Stock Exchange (NSE) has gained
more prominence
among fund management professionals as it is more representative,
the Sensex retains its prominence in the media because
of its long history.