Indian stock exchange to block SGX's new products

SGX previously said that it will launch new derivatives products after Indian bourses halted data licencing.

The Singapore Exchange (SGX) has been notified by the National Stock Exchange of India (NSE) that it has requested the Bombay High Court to block its new products.

It previously said that “work is ongoing” to evaluate a joint trading and clearing model in Gujarat International Finance Tech (GIFT) city with NSE to meet the risk management needs of international participants. This followed the news that India's three stock exchanges will halt the licencing of data for offshore derivatives which are linked to their domestic indices. The SGX has been looking for a workaround ever since.

According to an announcement, SGX has "full confidence" in its 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," it said.

SGX head of derivatives Michael Syn added, “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."

He added that they have 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."