SGX sidesteps India ban with Nifty move

MUMBAI: Singapore Exchange Ltd (SGX) said on Wednesday it will list new India equity derivative products in June, providing market participants continuity with their India risk management exposures.

It will simultaneously delist all derivatives contracts, including Nifty futures, which were based on a partnership with the National Stock Exchange of India Ltd. What it did not spell out, but is apparent from a circular it sent to its trading members, is that SGX will continue to offer trading in Nifty futures and options, but only by a different name. The new products will be called India futures and India options, and SGX will use the closing Nifty price to settle contracts.

In a joint statement on 9 February, Indian stock exchanges had decided to cancel licensing agreements for providing indices and securities-related data feed services to foreign exchanges and trading platforms. The exchanges also terminated licensing agreements with overseas bourses. The move was triggered by SGX’S decision to introduce futures contracts on top 50 Indian stocks from February 5.

“We are examining t he announcement...we have asked for more details from SGX on the product structure and hope to have a conversation with the SGX team to get a better understanding of the product. Post that conversation and review of the material in the public domain and the announcement made by exchanges in February, we will need to make an assessment whether or not the products announced by SGX are compliant with the announcement made by the Indian exchanges,” Vikram Limaye, MD of NSE, said.