Race to the Bottom: India’s BSE, NSE Reduce Fees for FX Derivatives

BSE Ltd, India's oldest stock market operator is reportedly reducing fees to gain additional traction in a variety of new markets, namely currency derivatives, in an effort to compete with the National Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term (NSE).

The elder BSE is presently rivals with its younger counterpart, the NSE, constituting a combined 94% market share in India – the NSE sees a greater percentage of currency derivatives trading however.

According to BSE Chief Executive, Ashishkumar Chauhan, in an interview to Reuters, "BSE did not have a habit of being successful. In the past few years we have had significant traction in new areas."

In an attempt to close this gap, the BSE has provided for lowered fees that is targeting currency investors – the NSE has since responded with discounts reaching upwards of 50% pending certain limitations.

This development is perfectly congruent with India’s central bank, which fully endorses the fostering of small and medium-sized companies to hedge their currency exposures.

"The currency derivatives market is still in its infancy in India. Competition is good," added Ashtosh Raina, Head of FX trading at HDFC Bank, in an accompanying statement.