India's state regulator, Securities Exchange Board of India (SEBI) has found 'abnormal' trading on one of its exchanges offering currency futures. SEBI's report which has not named the broker highlights alarming trading activity.
The rupee has weakened to record levels on the back of inflation and global uncertainty.
Currently trading at 51.461 against the greenback up by +0.035 or 0.07% at midday.
Currency futures are traded on MCX, NSE and the newly formed USE. Rumours suggest that the exchange in question is in fact the United Stock Exchange , its main promoter Jaypee Capital was under scrutiny for circular trading.
India's leading exchanges NSE and MCX introduced commission charges on currency transactions, business transferred to USE who was offering commission free trading; in October/ November 2011 USE saw over 35% market share. However reports about misleading practise at USE saw a dramatic decline of 65% reduction in client volumes.
Indias currency futures has a market share of around $8-10billion a day. It is widely used by corporates to hedge exposure. Indias rupee is a non convertible currency.
Forexmagnates team covered India's retail FX market in their quarterly report published in 2011.
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