INSUBCONTINENT EXCLUSIVE:
business in Indian equity derivatives is fast degenerating into an ugly fight, with the former already launching a full-fledged courtroom
battle against the latter.
SGX, in the first place, got a toehold in the business by using products that NSE had licensed to it
And before NSE could realise the size of the opportunity, SGX had already entrenched itself deeper into the domain
So much so, when NSE eventually pulled the plug last year, SGX quickly organised itself and sought to stand up on its own, leaving no room
for NSE to strike a bargain.
In a last-ditched effort, NSE has now approached the Bombay High Court for an interim injunction on the
alternative products that SGX is planning to launch on June 4.
Shares of Singapore Exchange dropped 2 per cent to Singapore dollar 7.48 in
morning trade on Tuesday following the news of the court case
SGX said it has the required regulatory approvals and is confident that its products would list in June before its licence with NSE expires
liquidity in Singapore attracted foreign investors to the bourse.
Some reports said SGX accounted for 40 per cent of Nifty futures turnover
at one point and had as much as 70 per cent of open interest on its platform.
In a bid to stem the migration of liquidity to SGX, NSE in
February ended its data-licensing pact with the exchange and informed SGX that the licensing of its products would expire in August
protect its share of the pie, SGX hit back in April, announcing the launch its own Nifty50-related products even as it prepared to delist
all derivatives contracts, including Nifty futures, which were based on its partnership with NSE.
In doing so, SGX took a circuitous route
It acquired direct market access to India futures options in the US from the US Commodity Futures Trading Commission (CFTC), thus paving
tried to take the fight to the US
This past week, the Indian bourse received a nod from the US derivatives regulator to sell its product to US investors
Thus far, US investors has been restricted from participating in Indian derivatives market directly, due to which they either had to do so
through SGX or various off-shore entities
