Technology Drives Bombay Stock Exchange’s Growing Market Share in FX Derivatives

The arrival of a faster, robust and more efficient trading system has supported exponential growth at the Bombay Stock Exchange

BSESince launching FX derivatives in November 2013, Asia’s most established trading venue boasts rising market share in trading volumes. The firm has managed to defy the odds and despite being a latecomer to the market place it has rekindled a four-horse race into a battle between two main participants, the BSE and NSE.

Data from all exchanges shows that the BSE has increased its position and holds over 50% of currency trading volumes’ market share. Ashish Chauhan, pictured, the firm’s CEO and one of India’s derivatives masterminds, gave an exclusive comment to Forex Magnates in London, celebrating the exchange’s performance: “We have been enhancing the exchange’s position as a global competitive provider since 2012.

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Technology has been a key driver of where the BSE is right now; coupled with a firm vision to provide users, and the market, sophisticated yet advanced products.”

The BSE launched currency trading sixteen months ago on its enhanced trading platform. Thus joining rivals, MCX, NSE and USE, the firm’s entrance has been well-received by market participants as Asia’s oldest exchange ticks all the boxes with a sound, stable and innovative technological solution at the forefront of its offering, with the backing of a renowned name in Indian financial trading.

“We’re ten times faster than the market and can execute several thousand more orders, we are raising the standards,” added Mr. Chauhan when explaining why volumes have spiked.

On the 9th of January, the BSE crossed new highs recording the highest single-day trading volumes in listed currencies, the firm saw over $3.68 billion executed. At rival, NSE, over $3.3 billion was traded, with troubled MCX reporting a mere $364 million.

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Electronic trading, a by-product of advancements in technology, is the new standard in the financial trading sphere. India has been quick to respond to the evolving landscape and one of its most successful exports, apart from ‘Bollywood’ or the infamous ‘chicken tikka,’ has been the Financial Technology brand, a technology firm that creates trading platforms and infrastructure for financial markets, with operations in Indian, Bahrain and Africa.

BSE’s Internationalisation Process

Overseas investors have found it difficult to access Indian markets and can only do so through specific vehicles, similarly, only certain products are traded cross-border, with the NIFTY in Singapore, INR USD in Dubai being the main ones, however, the BSE’s benchmark index, the SNESEX, has started gaining traction in the global markets with listings in Japan and UAE.

BSE’s cooperation with Deutsch Börse has supported the internationalisation process. Deutsche Börse signed up as the BSE’s archive distribute and through the German exchange’s global network the BSE has seen a sharp rise in trading volume and activity.

“We are pleased that Deutsche Börse ashishkumar_chauhan (1)is offering its N7 low latency network to our members and investors. This service will enhance infrastructure services available to BSE members and investors. The use of N7 will bring Indian markets closer to larger customers abroad and attract more capital for Indian capital markets,” explained Mr. Chauhan in a statement.

Developing Indian Markets

India’s financial markets’ landscape is taking heed of technological advances as it aims to bridge the gap between investment products and retail investors. In its latest initiative, SEBI, the main securities regulator, has launched a new online account set-up that makes the application process for a new account simple and easy. The new system known as SARAL Account Opening Form (SARAL AOF) was initiated on the 4th of March, 2015, as per a SEBI circular.

The new revised account opening procedures means that domestic investors can complete the form online and send the required documentation to setup a stock trading account, the new application form has been made available on BSE’s website for investors’ easy access.

The BSE has been involved in developing the secondary markets for mid-size businesses, the venue launched BSE SME to support growth in this emerging segment.

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