NSE files case against Singapore Exchange over India derivative products

Moneylife Digital Team 22 May 2018

National Stock Exchange (NSE) has filed a case in Bombay High Court against Singapore Exchange (SGX) over its plan to launch derivative products based on Indian stocks. NSE is seeking an interim injunction on new products to be launched by SGX from June 2018.

In a release, SGX says, "We have full confidence in our legal position and will vigorously defend this action. Our clients can continue to trade per normal. Our new India derivative products, which have received the relevant regulatory approvals, will list in June 2018 and allow our clients to seamlessly transition their India risk management exposures."

“SGX has a responsibility to provide risk management tools for our global clients and ensure there is no disruption to the marketplace. Our new India equity derivative products are essential to enable institutional investors to maintain their current portfolio risk exposure to the Indian capital markets. We have, from the onset, expressed to NSE that there is a need to maintain liquidity in the international India equity derivatives market, in order to connect international participants to GIFT IFSC. 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,” said Michael Syn, Head of Derivatives, SGX.

Earlier in January 2018, Singapore Exchange Derivatives Trading Ltd, a wholly-owned subsidiary of SGX had said that it would launch 50 single stock future contracts from next month. However, NSE reportedly asked SGX to delay introduction of single-stock futures, which would have tracked some of the subcontinents largest companies.

Both SGX and NSE have a licensing agreement that allows futures and options based on the benchmark NSE Nifty 50 Index to trade in Singapore, though existing products track indices and sectors and not individual shares.

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