SGX to continue trading in Nifty futures under new name from June
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 its new contracts.
“The reference value (to settle the new India contracts) will be the average of the final settlement prices of futures contracts traded on relevant exchanges that each: (i) references a broad-based India equity index covering 50 stocks listed on National Stock Exchange of India, which captures approximately 65% of its float-adjusted market capitalisation; and (ii) has the same last trading day as the expiring SGX India Futures Contract. The Relevant Exchanges are: (i) NSE; and (ii) NSE IFSC Exchange,” SGX’s circular said, carefully avoiding the use of the word Nifty, for which NSE has a trademark. However, it’s evident the reference is to the Nifty, which is made up of 50 stocks and captures approximately 65% of NSE’s float-adjusted market capitalization .
In a joint statement on February 9, 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 5 February, even as the Singapore exchange has gradually expanded its market share in Nifty futures trading to 52%.
“We are examining the product and will have discussion with SGX to examine whether the product’s constructs are violating the decision taken by us and other Indian exchanges,” Vikram Limaye, MD and CEO of NSE said on Wednesday.
MUMBAI: