NSE moves HC against SGX over launch of derivatives
MUMBAI: The National Stock Exchange of India Ltd (NSE) has sued Singapore Exchange Ltd (SGX) in the Bombay high court seeking to prevent the launch of Nifty-based products by the Singapore bourse in June.
“SGX has been notified by the NSE of an application made in the Bombay high court for an interim injunction on our new products,” SGX said in a statement on Tuesday. An email sent to an NSE spokesperson for comments was not answered immediately.
Justice SJ Khathawala of the Bombay high court admitted the matter on Tuesday and restrained the Singapore exchange from launching new derivative contracts until further notice. The court will hear the matter on Wednesday.
NSE’s subsidiary India Index Services and Products, which provides indices and index-related services, sought an interim relief from the court to stop the launch of these products. NSE has contended that SGX “is attempting to violate the existing licence agreement by the proposed launch of new derivatives contracts”.
On February 9, Indian exchanges decided to bar overseas bourses from trading in Nifty derivatives in an attempt to check migration of trades away from them. Two months later, on April 11, SGX announced a new product which works just like the Nifty index, bypassing the Indian exchanges.
The new products are called India futures and India options, and SGX will use the closing Nifty price to settle its new contracts.
“According to the petitioner (NSE) these new derivatives contracts are identical to certain products (SGX Nifty 50 Index Futures, SGX Nifty 50 Index Options and SGX Nifty Bank Index Futures), which were licensed under the licence agreement and proposed to be launched on the respondent’s platform despite issuance of the termination notice,” said the interim order.