Bombay Stock Exchange to carry USE data

The Bombay Stock Exchange (BSE) is preparing to disseminate real-time derivatives data from start-up derivatives exchange the United Stock Exchange of India (USE) via BSE's feed infrastructure, pending exchange approval for USE from the Indian regulator, officials say.

Abhijit Pai, information products manager at the BSE, says that once USE begins trading currency futures and interest rate derivatives, BSE will distribute market data for these products via its own datafeed.

BSE took a 15 percent equity stake in USE in August, and as part of the partnership has agreed to provide the trading and market data technology infrastructure to support the fledgling USE derivatives market. However, USE will maintain commercial responsibility for data agreements, and has already begun negotiations with various vendors to also redistribute the data, Pai adds.

The content is not yet available via BSE's feed infrastructure because the USE is still awaiting regulatory approval to operate an exchange marketplace. "We expect them to start operating any day now, but only when the regulatory clearance has been granted," Pai says.

The BSE will not have to make significant changes to its feed infrastructure to accommodate the new currency and interest rate derivatives content, as it already disseminates data for its own equity and equity index futures and options. "The formats are fairly similar. There may be one or two changes to the fields, but we already had experience in equity derivatives, so there weren't any major changes required to the feed," Pai says.

The derivatives data will complement existing content carried via the BSE feed, which uses a proprietary data format distributed using the TCP/IP transmission protocol and offers subscribers a choice of receiving Level 1 best bid and offer data, or a Level 2 feed with five levels of market depth. "All the datafeeds will come through a single server, so that users will be able to subscribe using the same network connections, and using a common data format and transmission protocol," Pai says.

The exchange also offers a separate over-the-counter trade-reporting facility for corporate bond trading, and makes the corresponding post-trade data available via BSE's Web site.

Subscribers to the BSE's equity data pay a monthly rate of $14 for Level 1 and $20 for Level 2, although vendors are given a set number of free-of-charge user accesses as part of their $25,000 and $40,000 annual license fees for Level 1 and Level 2 data, respectively. Although USE has not yet disclosed commercial terms for its data, Pai says USE will most likely not charge for its data initially, as the exchange seeks to establish a footprint and build liquidity in its derivatives contracts.

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