Vikram Limaye, Managing Director and CEO of National Stock Exchange of India (NSE) said that in India the retail investors and trading in equity derivatives works differently as compared to the world. The entire market is traded on exchange platform and as per statistics 95% of retail investors would fall in accredited investors category and are professional traders.
Limaye was speaking at a press conference following the launch of a report 'Future of Clearing' by World Federation of Exchanges (WFE).
The NSE chief was addressing the concern that India has considerable high volumes of equity derivatives and retail investors participate in these contracts.
"Our entire equity (derivatives) market is exchange traded so there is enough transparency and price discovery. Even margining as compared to the world over is real time at client level. Margins as also tweaked time to time depending on the market conditions. So the risk management is sound. As far as retail investors are concerned 95% of them can fall in the accredited investor category. They are not new traders and are professional traders and have a certain risk capital," said Limaye.
He also said that NSE and Singapore Stock Exchange (SGX) have submitted a proposal to Securities and Exchange Board of India (Sebi) and Monetary Authority of Singapore (MAS) for easing out of the SGX-Nifty contract and establishing a connect through the Gujarat International Finance Tech (GIFT) City.
The report on the clearing corporations said that there is a need to ensure clearing corporation's central role as neutral and independent risk managers through implementation of G20 standards. It also highlighted that even with the world exploring block chain for settlement purposes the role of clearing corporations will still be there.
Exchanges world over are engaged in studies to understand that whether it will improve systems. Even if block chain comes in the role of ccp will still be there. There are crypto currency platforms present today but they cannot be called as exchanges as they still do not conform to our standards," said Nandini Sukumar, CEO, WFE.