The National Stock Exchange (NSE) has dragged the Singapore Exchange (SGX) to court over the latter’s plans to unveil derivative products based on Indian stocks and indices.
“SGX has been notified by the National Stock Exchange of India of an application made in the Bombay High Court for an interim injunction on our new products,” SGX said in a statement issued on Tuesday. “We have full confidence in our legal position and will vigorously defend this action,” it added.
SGX restrained
While hearing the matter on Monday, Justice S.J. Kathawalla restrained SGX from launching the new products while posting the matter for hearing on Wednesday.
The arbitration petition by NSE has been filed under Section 9 of the Arbitration and Conciliation Act, 1996.
In its statement, SGX also said its new, India derivative products had received regulatory approvals and would list in June 2018. In April, SGX unveiled three derivative products based on the Indian market: SGX India Futures, SGX Options on SGX India Futures and SGX India Bank Futures.
A separate circular issued by SGX at that time said 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 mentioning the Nifty index. Soon after SGX made its announcement on April 11, NSE responded saying it was examining the SGX announcement and had also sought more details regarding the proposed products from the foreign bourse.
In February, the BSE, NSE and the Metropolitan Stock Exchange had said they would not share market data with any foreign bourse where derivative contracts based on Indian indices were 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.
