A top NSE official reported recently, “More than 300 members will be eligible to participate in currency futures trading on the National Stock Exchange of India on Friday, when the facility gets flagged off by the Union Finance Minister, Mr P. Chidambaram.”

The NSE, which is aiming at encouraging more participation in Currency Derivatives segment, has decided that no transaction charges will be charged on the trades done in this segment on the exchange from 29th August till 30th September.

The NSE circular however informed, “Every trading member participating in currency derivatives during the above period shall be required to make a lump-sum contribution of Rs 500 towards an Investor Protection Fund.”

Currency futures can be better understood as standardized foreign exchange contacts traded on a recognized stock exchange with the aim to buy or sell one currency on the account of another on a specified future date, at a price specified on the purchase or sale date.

There would be displaying, trading and reporting of prices in currency derivatives segment up to fourth decimal place instead of up to two. To illustrate, Rs 42.50 shall be displayed as Rs 42.5000.

Even Banks and all citizens of the country, except for NRIs and FIIs are open to come and participate in currency futures trade.