The Metropolitan Stock Exchange of India plans to stabilise its daily turnover at around Rs 2,000 crore after capital market regulator Sebi gave its approval to interoperability among the clearing corporations of exchanges.

Interoperability is a mechanism that allows market participants to choose any clearing corporation to settle their trades, irrespective of the exchange where they executed their trades.

“The exchange saw entry, but exits were difficult because of less liquidity. Sebi has taken a good initiative with interoperability. With this in place, if entry is in our exchange, exit can be in any other exchange. There was an 86 per cent increase in volume month-on-month after interoperability came in. On February 4, 2020, we reached the Rs 2,200-crore mark (daily turnover). Moreover, margins can be kept at any clearing corporation and trade can happen at any exchange,” said Ajit Singh, vice-president and head of business development and branches, Metropolitan Stock Exchange.

He added that the exchange was taking measures to stabilise the turnover to around Rs 2,000 crore per day by the end of March 2020.

The exchange has also got a boost from the regulator’s decision to allow the launch of weekly contracts on interest rate futures, besides introducing weekly futures options in cross-currency pairs of euro-dollar, pound-dollar and dollar-yen.

The interest rate futures will allow players to hedge market risk exposure from short-term policy moves such as RBI policy rate decisions without taking month-long futures position.

The weekly cross-currency option contracts will offer market participants the ability to hedge against specific policy changes by various central banks without having the need to take unnecessary and expensive monthly positions.

Also domestic players can benefit from the sudden changes in currency markets through shorter contracts.

“The confidence of banks and stock brokers have increased after interoperability. As a result, trading volume has gone up. We are now making efforts to stabilise the daily turnover. We are also developing new products and a marketing and branding strategy to attract retail clients,” said Singh.