Skip to main content

NSE sues Singapore Exchange in the Bombay HC over India product launch

By
NSE sues Singapore Exchange in the Bombay HC over India product launch
The NSE is trying to stop SGX from launching derivatives that could replace the Nifty 50 contracts that have traded in the city-state for 18 years.The National Stock Exchange (NSE) has sued the Singapore Exchange (SGX) in the Bombay High Court, escalating a dispute that threatens to leave international investors without one of the world’s most widely used offshore futures contracts.
The NSE is trying to stop SGX from launching derivatives that could replace the Nifty 50 contracts that have traded in the city-state for 18 years.Global funds use these instruments to hedge their positions in one of Asia’s biggest equity markets. Indian exchanges ended agreements that allowed offshore derivatives in February, leaving SGX and others scrambling
This is a big mess. I can’t see how SGX would go through with the launch when this is in the air. There’s a lot of gray here, because if investors do trade the new contract knowing this legal case is out there, is there legal liability that cuts through to the investors of the new contracts”, said David Shin, Asia head of global equity derivative sales at TD Securities in Singapore.
SGX, which announced the NSE’s legal action in a statement on Tuesday, said it has full confidence in its legal position and would vigorously defend itself.The Singapore bourse’s stock declined two per cent on news of the lawsuit. The Mumbai court is expected to hear the case on Wednesday, according to people with knowledge of the matter who asked not to be named because the details aren’t public
Investors having existing positions in SGX will be affected if the Mumbai court stays the start of the contract,” said Devansh Lakhani, director at Lakhani Financial Services in Mumbai. “Investors with outstanding positions may have to book losses if they aren’t able to rollover to the new contract”.
NSE spokesman Debojyoti Chatterjee declined to comment. The exchange’s move is another ratcheting up of tensions between bourses in India and Singapore amid efforts by the former to keep trading onshore.
China and Malaysia are among other emerging economies in the region that have taken steps to keep control of capital flows even as they push to further integrate into global markets. In India’s case, its been promoting a tax-free trading zone in Prime Minister Narendra Modi’s home state, known as Gift City, as an alternative to offshore centers.
“The principal objective is to prevent India’s turnover from being affected by overseas venues,” said Gopalan Sridhar, a Singapore-based fund manager at Aquarius Investment Advisors Pte. “At the same time, NSE is trying to increase access to international investors by increasing trading hours and allowing US clients to trade”.
US regulators last week approved allowing NSE members to accept American customer funds for trading in futures and options contracts on the Mumbai bourse. In February, India’s national exchanges said they would end all licensing agreements with overseas bourses and also stop providing live prices.
The Business Standard, New Delhi, 23 May 2018

Comments

Post a Comment

Popular posts from this blog

RBI deputy governor cautions fintech platform lenders on privacy concerns during loan recovery

By
  India's digital lending infrastructure has made the loan sanctioning system online. Yet, loan recovery still needs a “feet on the street” approach, Swaminathan J, deputy governor of the Reserve Bank of India, said at a media event on Tuesday, September 2, according to news agency ANI.According to the ANI report, the deputy governor flagged that fintech operators in the digital lending segment are giving out loans to customers with poor credit profiles and later using aggressive recovery tactics.“While loan sanctioning and disbursement have become increasingly digital, effective collection and recovery still require a 'feet on the street' and empathetic approach. Many fintech platforms operate on a business model that involves extending small-value loans to customers often with poor credit profiles,” Swaminathan J said.   Fintech platforms' business models The central bank deputy governor highlighted that many fintech platforms' business models involve providing sm
Post a Comment
Read more

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the rep
Post a Comment
Read more

India can't rely on wealthy to drive growth: Ex-RBI Dy Guv Viral Acharya

By
  India can’t rely on wealthy individuals to drive growth and expect the overall economy to improve, Viral Acharya, former deputy governor of the Reserve Bank of India (RBI) said on Monday.Acharya, who is the C V Starr Professor of Economics in the Department of Finance at New York University’s Stern School of Business (NYU-Stern), said after the Covid-19 pandemic, rural consumption and investments have weakened.We can’t be pumping our growth through the rich and expect that the economy as a whole will do better,” he said while speaking at an event organised by Elara Capital here.f there has to be a trickle-down, it should have actually happened by now,” Acharya said, adding that when the rich keep getting wealthier and wealthier, they have a savings problem.   “The bank account keeps getting bigger, hence they look for financial assets to invest in. India is closed, so our money can't go outside India that easily. So, it has to chase the limited financial assets in the country and
Post a Comment
Read more