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

Govt’s gamble on GST cuts: What do the bond and currency markets signal?

By
  It’s not just humans who suffer from cognitive biases; markets do too. Interestingly, different financial markets exhibit distinct biases, each interpreting events through its own prism of prejudice. Take the recent announcements on GST reforms: equity markets have chosen to view them through the lens of growth, while bond and currency markets are focusing on potential macroeconomic risks—fiscal pressures and current account challenges. So, which lens captures the true pulse?Equity markets may be right in expecting GST reforms to revive consumption, which has remained lacklustre for a while. But the key question remains—will this revival come at the cost of broader macro stability?It is well known that consumption stocks have rallied since the GST rationalisation announcement. But what about bond markets? What signals are they sending since this rejig was announced from the ramparts of the Red Fort?The signs aren't encouraging. Bond prices have slumped and yields have surged sinc...
Post a Comment
Read more

Luxury carmakers urge clarity on GST rates to boost festive season sales

By
  A clear picture regarding new GST rates at the earliest will help the overall auto industry, including the luxury car segment, to regain momentum in the ongoing quarter, which generally sees enhanced sales on account of the festive season.The high-powered GST Council, chaired by Finance Minister Nirmala Sitharaman, will meet on September 3-4 to discuss moving to a two-slab taxation.In an interaction with PTI, BMW Group India President and CEO Hardeep Singh Brar said the recent speculation about the change in GST rates has caused uncertainty in the minds of consumers.Consumer interest and demand is strong, but they (prospective buyers) have adopted a wait-and-watch approach, and this delayed decision-making is impacting new vehicle sales at a certain level, he noted."Expediting clarity on GST rates is essential to get back to speed and ensure the auto sector's contribution to economic growth during this quarter is robust," Brar stated.He also hoped that the sustainable p...
Post a Comment
Read more

Sebi proposes tighter norms for green bond third-party reviewers

By
  Sebi on Friday said it has proposed to tighten the norms to appoint independent third-party reviewers or certifiers for green debt securities to align them with requirements for other ESG-linked bonds.In a draft circular, Sebi said that the current norms for green bonds, introduced in February 2023, lack detailed requirements around reviewer independence, conflict of interest mitigation, and disclosure standards that are now in place for other ESG-linked securities under a June 2025 circular.The regulator's latest proposal seeks public comments on a revised framework that would bring parity by incorporating comprehensive criteria for third-party certifiers of green bonds on non-convertible securities.Under the proposed norms, issuers of green debt securities will need to appoint reviewers who are independent of their management, directors, and key managerial personnel. These reviewers will be remunerated in a way that prevents any conflicts of interest and possess relevant expert...
Post a Comment
Read more