Reliance, Financial Technologies plan new stock exchange

30 December 2008

After having set up and operated MCX commodity exchange in India and a number of specialised commodity exchanges, promoter Financial Technologies India Ltd, which operates one of the world's largest exchange networks,  is reported to be planning a stock exchange in partnership with Anil Dhirubhai Ambani Group firm Reliance Money. 

FT may be eyeing the possibility of an exchange for small  and medium-sized enterprises, an area which is litterred with several failed attempts.

Business Standard reported today that the Reliance Money and Financial Technologies are exploring the option of setting up their own equity exchange.

Quoting sources familiar with the developments, the paper said both companies see enormous scope in an SME exchange since only 5 per cent of Indian households invest in equities compared to the international average of up to 50 per cent.

The scope for a new exchange can be seen from the rapidly growing business of equity derivatives, which are basically instruments whose value is at least partly derived from one or more underlying equities.

The NSE enjoys a virtual monopoly in equity derivatives with daily average volumes at Rs10,000 crore in the spot segment. In comparison, the BSE has a daily average volume of just Rs4,000 crore. The NSE's daily average volume in derivative segment is Rs40,000 crore.