SGX and NSE resume talks over Gift City

Singapore Exchange Ltd (SGX) and the National Stock Exchange of India (NSE) have resumed discussions for a potential collaboration at the Gujarat International Finance Tec- City (Gift), India’s only International Financial Services Centre (IFSC).

Talks between the two exchanges had stalled amid a legal tussle over launch of new products by the Singapore bourse. A collaboration at Gift City could connect the trading systems of NSE and SGX, and enable clients of the Singapore bourse to deal in Indian derivatives.

The move to terminate licensing agreement by Indian exchanges with their foreign counterparts will virtually halt offshore trading of India products, once the notice period ends. To counter the move, SGX — in which trading volumes in India products is quite popular — launched new India products to replace Niftylicensed products.

The move was challenged by NSE, as the new products were exact replicas of Nifty products that it licenses. The matter has gone into arbitration. “Pending the outcome of the discussions, the learned arbitrator has granted a deferment of arbitration proceedings between SGX and IISL, the National Stock Exchange (NSE)’s index company,” SGX said in a statement on Wednesday.

However, the directions under the arbitration order remain effective, which means SGX will not be able to launch its new India products. “SGX and NSE will jointly engage and consult relevant stakeholders on the proposed collaboration,” it added.

Trading volumes on NSE IFSC at Gift are seeing a pick up. Earlier this month, volumes crossed the $500-million mark for the first time.

Meanwhile, markets regulator Securities and Exchange Board of India (Sebi) met Singapore counterpart Monetary Authority of Singapore (MAS) on Tuesday to discuss the SGX-NSE issue.

“SEBI and MAS held discussions on various issues of cooperation, including the amicable resolution of the NSE-SGX issue,” said Sebi in a statement.