NSE drags SGX to court over India derivatives products

Source – thehindu.com

The National Stock Exchange (NSE) has dragged the Singapore Exchange (SGX) to court over the latter’s plans to launch derivative products based on Indian stocks and indices.

“SGX has been notified by the National Stock Exchange of India (NSE) of an application made in the Bombay High Court for an interim injunction on our new products,” said the overseas exchange in a statement issued on Tuesday.

We have full confidence in our legal position and will vigorously defend this action, it added.

Meanwhile, the overseas exchange has also said that its new India derivative products, which have received the relevant regulatory approvals, will list in June 2018.

“We remain open to working with NSE and other relevant stakeholders to develop a solution that meets the risk management needs of global market participants,” the statement quoted Michael Syn, Head of Derivatives, SGX.

In April, SGX announced the launch of three derivative products based on the Indian market. The product offerings included SGX India Futures, SGX Options on SGX India Futures and SGX India Bank Futures.

Interestingly, a separate circular issued by SGX at that time stated that the settlement price of the SGX India futures will be based on a “broad-based India equity index covering 50 stocks listed on National Stock Exchange of India” without specifically mentioning the Nifty index.

Soon after SGX made its announcement on April 11, NSE responded by saying that it was examining the SGX announcement and had also sought more details regarding the proposed products from the foreign bourse.

In February, the three Indian bourses, BSE, NSE and the Metropolitan Stock Exchange (MSE) issued a joint statement saying that they would not share market data feed with any foreign bourse where derivative contracts based on Indian indices are offered.

At that time SGX was offering the hugely popular Nifty futures contracts that attract many global investors due to its low trading costs and also the attractive tax regime of the country. The SGX Nifty contracts will cease trading from June 4.