The government on Friday proposed measures to develop the bond, currency and derivatives markets in the country, a move, which will help in further expanding the segments.

In the Budget proposals, Finance Minister P Chidambaram announced measures, which include launch of exchange-traded currency, interest rate futures and development of transparent credit derivatives market with appropriate safeguards.

The tradability of domestic convertible bonds would be enhanced by putting in place a mechanism that would enable investors to separate the embedded equity option from convertible bond and trade it separately.

The government would also encourage the development of market-based system for classifying financial instruments based on their complexity and implicit risks. The Finance Minister has also proposed to extend the requirement of Permanent Account Number (PAN) to all transactions in the financial market, subject to suitable threshold exemption limits.

In order to provide a seamless national market for securities, Chidambaram also proposed to request the Empowered Committee of State Finance Ministers to work with Central Government to create a truly pan India market for securities. The move would expand the base and enhance the revenues of the state governments.

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