New Delhi: National Stock Exchange (NSE), one of the two exchanges where the currency futures are traded, has justified its decision to keep Financial Technologies, promoter of MCX-SX, under ‘watch list´ saying that there is a ‘solid reason’ behind this.
Multi-commodity Exchange-SX is the other bourse where currency futures are traded.
When contacted, an NSE spokesman K. Hari said: “It is an issue between exchange and software vendor. There has to be a solid reason for keeping FTIL under watch list. We will let you know through official release. Right now, we do not want to comment on this issue.”
NSE about two months back had denied permission for a software developed by Financial Technologies for currency futures and kept the firm under ‘watch list´.
On its part, the Financial Technologies (India) has slapped a legal notice on NSE for keeping its under ‘watch list´.
Financial Technologies is the technology vendor whose software NSE has been using to trade in equity, cash and futures and options for a decade.
MCX officials claim that NSE has taken arbitrary decision and has not even provided reasons for keeping for its decision.
“They have no problem with our software on which runs equity, cash, and F&Os. And we do not know why it is not giving permission for currency futures,” FTIL spokesman Suman Das Sharma said.
He said that in the mid-October, FTIL received a letter stating that it is been kept under watch list. “We have given a legal notice asking under what circumstance FTIL is been kept under watch list. What does ‘watch list´ mean and why it has denied their service for currency futures,” he said.
API is interface platform between brokers and the exchange. As MCX-SX is competitor of NSE in currency futures, NSE did not use the software developed by FTIL and instead authorised Bangalore-based Omnesys Technologies for providing software for currency futures.
Omnesys is an empanelled vendor on both NSE and the BSE for providing trading solutions to their members.
The contention of FTIL is that due to rejection from NSE, brokers will have to work on two terminals — one separately for NSE currency futures while another for all others including equity, commodities and F&Os.
“We may not incur a major financial loss due to rejection from NSE,” Sharma said.
According to experts, FTIL would lose out about Rs1 crore a year as it charges about Rs25,000 as software fee plus annual maintenance charges. NSE has about 400 members in the currency futures, they added.
NSE started currency futures trading on 29 August and MCX-SX on 6 October. The daily turnover in the currency futures market is about Rs2,000 crore, with both exchanges sharing about half of the business each.