Mumbai: The Bombay Stock Exchange (BSE), on Monday, has signed up a contract with Chicago-based US Futures Exchange (USFE) that will permit BSE Sensex futures to be dealt on the USFE.

The deal was signed to ease participation of US capitalists in trading of Sensex futures. The dollar denominated futures trading in the BSE-benchmark index Sensex will start from February 22 next year.

Currently, US capitalists can purchase only a few Indian stocks listed on the New York and Nasdaq exchanges via an American Depository Receipt (ADR) authorisation.

But, the recent contract will allow US investors to take part directly in Indian securities (equity market) without getting American Depository Receipt (ADR) sanction.

The notional value of USFE’s Sensex futures agreement will be 40,000. The deal will have a tick size of $5, and will trade 23 hours per day and the settlement will occur on a monthly basis to the corresponding value of BSE's futures contract.

Rajnikant Patel, BSE managing director and chief executive said, “The launch of a futures contract based on the Sensex will facilitate overseas investors in taking direct exposure to Indian equities.”

“I am confident the listing of the dollar-denominated Sensex contract on USFE will elicit a very positive response from the international investing community,” he said.

The recent step will also improve volume in the BSE’s futures and options section that lags behind opponent National Stock Exchange.

Satish Nandapurkar, CEO of USFE stated, “The Sensex futures product is an ideal fit for USFE’s global distribution model and commitment to innovation.”

“USFE’s listing of the Sensex will provide US market participants with direct access to pure Indian equities exposure through existing futures accounts,” Mr. Nandapurkar added.