Not a BOLT from the blue, but an enduring relationship. When it needed to launch online derivatives trading, the Mumbai Stock Exchange (BSE) once again came to CMC.

The product
DTSS - Derivatives Trading & Settlement System
Handles trading of all kinds of derivative products like exchange trades index futures, index options and stock options

The client
The Mumbai Stock Exchange (BSE)
India's oldest stock exchange widened the scope of its operations by introducing derivatives trading in the millennium year, 2000

The development of the derivatives market in India was taken up with the objective of providing greater width to the securities market. A committee headed by Prof L C Gupta comprising representatives of the regulatory agency, stock exchanges, financial institutions, market participants and academicians, was formed in 1997 to develop a regulatory framework for derivatives trading in the Indian market.

Its report was released in April 1998, and laid down the roadmap for the development of the derivatives market. It recommended the introduction of futures and options. Later, another committee under the leadership of Prof J R Varma set out recommendations for risk containment measures in the derivatives market.

The Mumbai Stock Exchange (BSE) entered into an agreement with CMC to develop a trading and settlement solution for financial derivatives, based on the guidelines laid down by the Gupta committee and the Varma committee.

In October 1998, CMC started development of the derivatives trading and settlement solution, which was delivered to the BSE in April 1999. On June 9, 2000, the BSE became the first stock exchange in India to launch derivatives trading with trading in index futures. Since then, the BSE has launched a number of instruments. Today, the system is used for trading in futures and options on the index and in stocks.

DTSS was developed in a generic form, and CMC is today capable of delivering trading and settlement facilities in various asset classes like indices, stocks, commodities, bonds, etc.

The National Multi-Commodity Exchange of India is using CMC's DTSS solution for trading in more than 40 different types of commodities.

DTSS is developed on an open system (Unix). The base development environment was originally on an HP platform, but can be easily ported to any other flavour of Unix. The solution is based on a three-tier client-server and is highly scalable.

It has strong security features like encryption, extensive administration features and a comprehensive audit trail. DTSS uses multicast technology to disseminate market information to its clients and to the world. Multicast allows for the optimum use of network bandwidth. The public data sent on the multicast channel is compressed to allow more data to be disseminated at shorter frequencies.