After emerging as a major player in the derivative segment in the domestic market,

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the National Stock Exchange is soon going to provide local investors with an opportunity to trade in global indices.

NSE is launching derivative contracts on the S&P 500 and the Dow Jones Industrial Average from Monday (August 29).

In a release issued to media, the stock exchange said the new derivative contracts will include futures on both DJIA and S&P 500, and options on S&P 500. NSE has decided to skip transaction charges on trades in these contracts till February 29, 2012, in a bid to encourage wider investor participation.

This is the first time derivative contracts on global indices are being launched in India. This is the also the first time in the world that futures contracts on S&P 500 index are being introduced and listed on an exchange outside of the home country, the release said.

“We are happy that we have been able to provide these unique products on an Indian trading platform. Derivative contracts on these global indices will provide Indian investors easy access to the US market during Indian market hours, without taking any currency risk,” said Ravi Narain, managing director and CEO of NSE.

All members of equity derivatives segment of NSE shall be able to trade in these rupee-denominated derivative contracts on the S&P and DJIA for themselves as well as their clients, through their existing trading, clearing and risk management infrastructure, with no additional investment.

The settlement guarantee now available in the futures and options segment shall be automatically extended to these products as well. At present, Indian investors are allowed to invest in foreign assets, subject to the limit stipulated by the Reserve Bank of India.