United Stock Exchange

United Stock Exchange of India Limited, commonly known as the United Stock Exchange or USE, was an Indian pan-India exchange focused primarily on currency derivatives. It was established as a coordinated financial-market initiative involving Indian public-sector banks, private-sector banks, international banking interests and corporate institutions. The exchange was presented as the fourth nationwide exchange launched in India for trading financial instruments and was intended to broaden access to regulated currency markets while providing banks and other market participants with a venue for hedging foreign-exchange exposure. USE began operations on 20 September 2010. Its initial product range consisted of standardized futures contracts on four rupee-linked currency pairs: United States dollar–Indian rupee, euro–Indian rupee, pound sterling–Indian rupee and Japanese yen–Indian rupee. Contracts were listed for each of the following twelve months, and participants could trade both outright futures and calendar-spread contracts. This structure was designed to support businesses, financial institutions and other users seeking to manage or take positions on movements in exchange rates. The exchange attracted substantial attention on its opening day. According to the exchange’s reference material, USE captured 52 percent of the currency-futures market on that day and recorded a national single-day volume record for currency futures. Its stakeholder network included a large group of public-sector banks, among them State Bank of India, Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank, Union Bank of India and several other state-owned institutions. Private-sector participants included Axis Bank, Yes Bank, Federal Bank, Jammu and Kashmir Bank, HDFC Bank and ICICI Bank. MMTC and India Potash were also identified as associated corporate institutions. USE expanded beyond its initial futures offering by commencing trading in United States dollar–Indian rupee currency options in 2011. This made it the second Indian exchange to trade currency options, according to the supplied reference material. The exchange also sought permission to enter the debt segment, although the available material does not establish whether that initiative was approved or commercially launched. Access to the exchange was organized through registered members. Trading members could trade for their own accounts and for clients but could not clear and settle trades. Clearing members could clear and settle transactions for trading members through the exchange’s clearing house, identified in the reference material as ICCL. Membership was subject to Securities and Exchange Board of India requirements as well as USE-specific standards intended to support participant quality and reduce counterparty risk. The exchange reported more than 400 trading members, more than 50 clearing members and 10 clearing banks in its published membership information. The available source material establishes USE’s formation, launch, currency-derivatives focus and early product development, but does not provide enough reliable information to describe its later operating status, ownership changes, financial performance or present-day activity. Those aspects therefore remain unconfirmed in this dossier.

United Stock Exchange of India Limited was created as an Indian nationwide exchange dedicated chiefly to currency derivatives. Its formation brought together a broad institutional constituency: public-sector banks, private-sector banks, international banking interests and corporate houses. The exchange was associated with 21 Indian public-sector banks, including State Bank of India, Bank of Baroda, Punjab National Bank, Bank of India, Canara Bank, Union Bank of India and other state-owned lenders. Private-sector stakeholders included Axis Bank, Yes Bank, Federal Bank, Jammu and Kashmir Bank, HDFC Bank and ICICI Bank. MMTC and India Potash were also identified as participating corporate institutions. Gaurav Arora and Jaypee Capital were described as the founders and principal promoters. USE launched operations on 20 September 2010. It entered the market with futures contracts linked to four major foreign currencies against the Indian rupee: the United States dollar, euro, pound sterling and Japanese yen. For each currency pair, the exchange offered contracts covering the next twelve months. Participants could trade outright contracts, which represented direct positions in a currency pair, as well as calendar spreads involving contracts with different maturities. The product design targeted banks, companies and other market users needing to hedge or manage foreign-exchange exposure, while also supporting market participants taking directional positions. The launch generated considerable early market visibility. The supplied reference material says that USE obtained 52 percent of the currency-futures market on its first day and set a record for the highest single-day currency-futures volume in India. This result reflected the strength of the exchange’s institutional backing and the strategic importance of currency derivatives in a market where banks and businesses regularly manage rupee exposure against major international currencies. In 2011, USE broadened its product range by introducing United States dollar–Indian rupee currency options. The exchange was identified as the second Indian exchange to trade currency options. Options complemented the existing futures business by giving participants another method for managing exchange-rate risk and constructing more flexible hedging or trading strategies. USE also applied for permission to begin operating in the debt segment, although the available reference material does not confirm the outcome of that application. The exchange used a member-based access model. All transactions had to be conducted through registered members, while non-member users could participate as clients of those members. Trading members were permitted to trade for themselves and their clients but were not authorized to clear and settle transactions. Clearing members were entitled to clear and settle trades for trading members through the exchange clearing house, referred to in the source material as ICCL. Membership standards incorporated regulatory requirements established by the Securities and Exchange Board of India as well as additional requirements set by USE. The stated purpose was to promote participant credibility, protect users and limit counterparty risk. Published membership information described an ecosystem of more than 400 trading members, more than 50 clearing members and 10 clearing banks. USE also charged transaction fees for futures and options, with rates varying according to traded value or premium value. The available material, however, does not provide sufficiently verified information about subsequent ownership, management, financial results, regulatory status or continuing operations. The exchange’s later history and present status therefore require further review.

• 2011

  USD-INR currency options introduced

  [1]United Stock Exchange of Indiaen.wikipedia.org

  USE began trading USD-INR currency options and was described as the second Indian exchange to offer currency options.

• 2010

  Operations launched

  [1]United Stock Exchange of Indiaen.wikipedia.org

  USE began nationwide operations on 20 September 2010, initially offering currency-futures contracts on USD-INR, EUR-INR, GBP-INR and JPY-INR.

• 2010

  Strong first-day currency-futures performance

  [1]United Stock Exchange of Indiaen.wikipedia.org

  Reference material reports that the exchange captured 52 percent market share on its opening day and recorded a single-day currency-futures volume record.

A nationwide Indian marketplace specializing in regulated currency derivatives and foreign-exchange risk-management instruments.

• Foreign-exchange derivatives · 2010

  Currency futures

  USE’s initial product family consisted of standardized futures contracts on four rupee-linked currency pairs: USD-INR, EUR-INR, GBP-INR and JPY-INR. The exchange listed twelve successive monthly contracts for each pair and supported both outright positions and calendar-spread trading. These instruments were intended for hedging, price discovery and trading exposure to movements in the Indian rupee against major international currencies.

• Foreign-exchange derivatives · 2011

  USD-INR currency options

  Introduced in 2011, USD-INR options extended USE’s currency-derivatives range beyond futures. Options provided market participants with a different risk and payoff structure for managing or trading rupee-dollar exchange-rate exposure. The available reference identifies USE as the second Indian exchange to begin trading currency options.

• 2011

  Expansion into USD-INR optionsProduct launch

  Background

  After establishing a currency-futures business, USE sought to broaden the ways in which participants could hedge and trade foreign-exchange exposure.

  Action taken

  The exchange began trading USD-INR currency options.

  Aftermath

  USE became the second Indian exchange to trade currency options, as described by the supplied reference material.

  Source

• 2010

  Launch as a currency-derivatives exchangeProduct launch

  Background

  The exchange was established to create a nationwide Indian venue for regulated financial instruments, with an initial emphasis on foreign-exchange risk management and currency trading.

  Action taken

  USE commenced operations with futures contracts on USD-INR, EUR-INR, GBP-INR and JPY-INR, including outright and calendar-spread contracts.

  Aftermath

  The exchange reported 52 percent market share on its first day and a record single-day volume in currency futures, according to the supplied reference material.

  Source

1. 1United Stock Exchange of Indiaen.wikipedia.org
2. 2United Stock Exchange official websiteuseindia.com