India's NSE tries to stop SGX's new India derivative products

India's biggest stock exchange has gone to court to stonewall a plan by the Singapore Exchange (SGX) to roll out three new India equity derivative products on June 4, deepening a rift between the two exchanges that have been jostling to protect their turf since February.

The National Stock Exchange of India (NSE) notified SGX of its application to the Bombay High Court for an interim injunction on the three products - SGX India Futures, SGX Options on SGX India Futures and SGX India Bank Futures.

The SGX is standing its ground on its June 4 launch of the products, which are an alternative to its flagship Nifty 50 contracts to be delisted in August. The delisting follows NSE's shocking move in February to scrap an 18-year agreement because it wants to end offshore trading of derivatives tied to its benchmark indices.

The SGX said in a statement: "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."

The products are designed to cushion the blow from NSE's decision to end the long-term pact and replace SGX's popular Nifty 50 contracts.

SGX's head of derivatives Michael Syn said in the statement: "SGX has a responsibility to provide risk management tools for its global clients and ensure that there is no disruption to the marketplace."

He said SGX remains open to working with NSE and other relevant stakeholders to develop a solution.

The latest move may be another setback for the SGX, which has also been in talks with the NSE to sweeten the Gujarat International Finance Tec-City proposition to international institutional investors.


The impact of the Mumbai court's decision - which could come in as early as today - on SGX is unclear.

One market observer questioned its enforceability given that it involves a different jurisdiction, in this instance, Singapore. "India's intention may be to create some noise and confusion over the new products. This move has no leg (to stand on) as it involves different jurisdictions," said the observer. - THE STRAITS TIMES