The Securities & Exchange Board of India (Sebi) is doing its best to encourage FIIs and NRIs to participate in currency future market. The currency future market was launched in India during the last week.

Many FIIs and NRIs have shown interest in the currency futures trading after the encouragement of SEBI. Sebi, chairman CB Bhave said that they should get some experience in future trading.

While speaking at an Assocham function in New Delhi, TC Nair said that the security board is contemplating to launch interest rate derivatives by January. The regulatory body is examining the various currency contracts such as rupee-euro and rupee-yen. The present rules in India allow currency trading in Indian currency only.

The country has registered about 1400 FIIs after the launch of future currency trading. The security board is expected to clear another 20-30 FIIs whose applications are still pending with the body. The body has also put some restrictions on P-notes. P-notes are derivatives instruments with shares or derivatives which are issued by FIIs to their overseas clients.

The board is also planning to start exchange traded funds (ETFs) which are based on interest rate futures (IRF) in 2009. Futures can be in the form of treasury bills and notes, certificates of deposit, commercial paper, or any other interest-bearing certificates. According to the study of ASSOCHAM, the country is already flooded with private equity and joint ventures.