BSE Ltd. and Financial Technologies (India) Limited (FTIL) have signed an agreement to provide ODIN-a brokerage solution of FTIL-to BSE members as a part of the exchange's efforts to re-launch its equity derivatives segment. As per the agreement, the empanelled members on BSE will trade on its derivatives segment using ODIN's Computer-To-Computer-Link (CTCL) platform.
BSE, Asia's oldest and first stock exchange, joined hands with FTIL, a global leader in offering technology solutions and domain expertise in creating and operating financial markets in multi-asset classes, with an aim to create sustainable liquidity and build a healthy derivatives order book on this segment, thereby implementing the two-tier series of its market-making scheme Liquidity Enhancement Incentive Programmes (LEIP).
The key features of LEIP include payments being made to its members for derivatives traded volumes and open interest (OI) maintained in the segment. This is pursuant to market regulator Securities & Exchange Board of India (SEBI) granting permission in June 2011 to introduce liquidity enhancement schemes in the derivatives segment. Through this scheme, the exchange is hoping to increase its daily turnover in the derivatives segment manifold. The exchange has earmarked a total of Rs 107 crore to be distributed as incentives for the scheme that will be in force for seven months in two separate phases.
"BSE has joined hands with FTIL to enable our members connect to our exchange platform quickly and trade on equity derivatives segment at a minimal cost. We are happy to have on board FTIL providing front-end trading solutions to our brokers and institutional clients. We are confident this partnership will be a great 'value addition' for us to meet our objectives," said Mr. Madhu Kannan, MD & CEO, BSE.
Commenting on the achievement, Mr. Dewang Neralla - Co-founder, FTIL, said, "We aim to seamlessly integrate BSE's equity derivatives segment with ODIN and assist the exchange in its endeavours to revive the segment. Today, ODIN is being used by India's leading exchanges including NSE, BSE, MCX-SX, NCDEX, NMCE, MCX, among others. This new partnership will be a 'win-win' alliance for both BSE and FTIL, as ODIN enjoys over 80% market share in front-end CTCL trading solution."
ODIN™, the 'trading platform of choice', offers real-time connectivity to exchanges and its back-office systems with faster inter-segment trading. It is one of the most preferred CTCL solutions and has revolutionized exchange trading solutions in India. There are about 6,00,000 FTIL's ODIN licenses, servicing more than 880 trading institutions and brokerage clients, including top 30 Indian banks.
(^ Based on Frost & Sullivan Industry Research Report on Electronic Trading Solutions in India)