NSE to launch S&P 500, Dow Jones futures from 29 Aug

New Delhi: The National Stock Exchange today said it will launch derivative contracts on benchmark US indices S&P 500 and Dow Jones Industrial Average (DJIA) from Monday, a move that will help Indian investors to bet on the world’s most influential stock markets. “The NSE is launching derivative contracts on the world’s most followed equity indices, the S&P 500 and the Dow Jones Industrial Average from 29 August,” it said in a statement issued here. [caption id=“attachment_69855” align=“alignleft” width=“380” caption=“The Dow Jones Industrial Average. Shannon Stapleton/Reuters”]  [/caption] This is the first time that derivative contracts on global indices are being launched in India. This is also the first time in the world that futures contracts on the S&P 500 index are being introduced and listed on an exchange outside of their home country, the US. In order to encourage active participation in the futures and options (F&O) contracts, NSE has decided that it would not levy any transaction charges on the trades done in the contracts from the date of commencement till 29 February, 2012. The new contracts will include futures on both the DJIA and the S&P 500 and options on the S&P 500, it added. NSE would launch four quarterly futures contracts on S&P 500 and DJIA expiring in March, June, September and December. The expiry date for these contracts will be the third Friday of the respective contract month. “We are proud and happy that we have been able to provide these unique products on an Indian trading platform. We have been continuously trying to bring new products and asset classes, to meet investor needs. “Derivative contracts on these global indices will provide Indian investors easy access to US markets in Indian market hours, without taking any currency risk,” NSE Managing Director and Chief Executive Ravi Narain said. The rupee denominated derivative contracts on S&P and the DJIA introduced by NSE would provide Indian investors with easier access to gain exposure to the US equity market. All the members of the equity derivatives segment of NSE shall be able to trade this product for themselves and their clients, through their existing trading, clearing and risk management infrastructure, with no additional investment. The settlement guarantee currently available in the F&O segment shall be automatically extended to these products as well. In late June, NSE said it has got market regulator Sebi’s approval to launch derivative contracts on these two US indices. Sebi had released the regulatory framework for such products in January. PTI