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In a major reprieve for foreign funds, the Singapore Exchange (SGX) may be able to facilitate trading of the Nifty index on its platform even in 2019.
An arbitrator appointed by the Bombay High Court has directed the National Stock Exchange (NSE) to extend the agreement of Nifty-licensed products to SGX until the arbitration concludes. The licensing agreement was to end in August 2018, and could now be extended till early next year as arbitration proceedings are continuing and the hearings on evidence are expected to commence in early 2019, the SGX said in a statement.
Trading volumes
It was feared that the Nifty index could be taken off from SGX by August and foreign funds and traders playing in it may have to wind up their positions. India has been fighting to get back trading volumes that it lost to overseas destinations like SGX and it was because of this that the NSE decided to withdraw from the licensing agreement it had with SGX. The Singapore bourse countered with an announcement of the launch of its own India index.
As part of the ongoing arbitration proceedings, SGX and IISL, NSE’s index company, were directed by an order dated June 14 passed by the Learned Arbitrator, to facilitate the continued listing of SGX Nifty products for at least two successive contract month maturation beyond the arbitration’s completion date.
“SGX was directed to refrain from offering new India equity derivatives products such as those announced on April 11 2018, in accordance with the Order, available here. Arbitration proceedings are continuing and the hearings on evidence are expected to commence in early 2019,” SGX said.
“The injunction against the new products... first imposed by the Bombay High Court, has been extended and continues until completion of the arbitration proceedings,” the NSE said in a statement.
The Bombay High Court injunction was against three products that SGX proposed to launch this month. They were SGX India Futures, SGX Options on SGX India Futures and SGX India bank futures. The licence for the SGX Nifty contracts stands extended for two successive contract months beyond the arbitration award date, the NSE said.
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