From the April 01, 2010 issue of Futures Magazine • Subscribe!

CME Group to offer Nifty Fifty Index

It will soon be possible to trade the very popular and liquid S&P CNX Nifty Index (the Nifty 50), the leading Indian benchmark index, at CME Group denominated in U.S. dollars, and to trade the S&P 500 and Dow Jones Industrial Average indexes in rupees from India.

The National Stock Exchange of India (NSE) and CME Group announced cross-listing arrangements, including license agreements covering benchmark indexes for U.S. and Indian indexes, during the FIA’s annual conference in Boca Raton, Fla.

The license to the Nifty 50 from NSE’s affiliate India Index Services & Products Ltd. (IISL), which is exclusive to CME Group within the Americas and Europe, is in addition to the existing licensing arrangement between Singapore Exchange Ltd. (SGX) and IISL, according to a release.

Ravi Narain, managing director and CEO of NSE says the Nifty 50 trades an average of two million futures and options contracts a day, 75% of which are traded from India. The product has more of a retail focus, with an approximate value of $5,000.

“Everyone wants a piece of India, and what better way than an index? [The Nifty 50] is the country,” Narain says.
“Our new partnership with NSE is an integral part of our global growth strategy,” adds Craig Donohue, CEO of CME Group.

Narain says that there is a robust proprietary trading community in India that could add to liquidity with the potential of an active arbitrage. “[There are] very significant prop traders in India,” he says, though he adds an arbitrage would be complex, as the different time zones would make it difficult.

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