U.S. CLIENTS CAN NOW INVEST IN NIFTY FUTURES

MUMBAI: The National Stock Exchange of India (NSE) on Friday became the first Indian stock exchange to be recognised by the Commodity Futures Trading Commission (CFTC), NSE said in a press statement.

NSE got a part 30 exemption which will enable members of the exchange to trade in derivatives for US clients. The exemption would allow US customers an increased access to Indian futures markets.

“The order issued to NSE permits its members to accept US customer funds directly for the purpose of trading in futures and options contracts on NSE without the members having to register with the CFTC as a futures commission merchant,” NSE said in a press statement.

Currently, US-based foreign investors can freely invest only in India’s broad based indexes Nifty 50 and Sensex as these were the only ones recognised by CFTC.

“The CFTC currently recognises only two Indian products that is — Nifty 50 and Sensex. This rendered direct participation or trading in single stock futures by US Funds not possible. So many Foreign Portfolio Investors (FPIs) over the years used to either trade through offshore exchanges or had created structures via jurisdiction such as Mauritius or Singapore,” said Suresh Swamy, partner, PwC India. US Funds are funds that have more than 51% US residents as investors. The Indian exchanges had been working on a solution.