INSUBCONTINENT EXCLUSIVE:

MUMBAI: US investors can directly bet on Indian derivativesUS investors will now be able to trade in Indian derivatives market directly. The

National Stock Exchange (NSE) has received nod from US derivatives regulator, Commodity Futures Trading Commission (CFTC), to sell its

CFTC has in the regulatory and risk management environment in India and in NSE

This will enable NSE's trading members (domestic and foreign brokerages) to trade broad based indices directly for US clients

accept US customer funds directly for trading in futures and options contracts on NSE without them having to register with the CFTC as a

scenario, some US investors were restricted from participating in Indian derivatives market directly

bring US investors back into the Indian derivatives market

A lot of US based investors, who have been unable to access the Indian markets so far, would now start looking at setting up onshore FPI

local laws and regulations in India applicable to NSE members provide a comparable level of customer protection, including licensing

(futures and options) segment on NSE without having to register with the CFTC as a futures commission merchant

It is expected that certain US hedge funds will now want to directly trade in Indian futures and options which will help increase trade

after the Sebi ban on naked derivatives through P Notes last year and the recent withdrawal of data feed licence given by Indian exchanges

to SGX

A lot of trading in Nifty futures used to happen on SGX, which came under cloud due to the licence withdrawal which will be effective August

US hedge funds now have the much needed clarity on FO trading which is important specially for their shorting strategy though one must add

that the 30% capital gains tax in India on derivative gains acts as a dampener to some extent," Gandhi said. Through its Part 30 Exemption

program, the CFTC provides US customers with increased access to foreign futures markets

The CFTC began the Part 30 Exemption program nearly three decades ago and has expanded relief to 12 jurisdictions

Currently, over 120 foreign brokers across the globe are authorised to deal directly with US futures customers, resulting in more efficient

and less costly transactions. NSE must promptly notify the CFTC of any material changes to its local laws and regulations

to NSE transactions upon request, CFTC said in a statement posted on its website