Singapore Exchange has been granted a licence extension to continue listing and trading SGX Nifty contracts beyond the original expiration of the product licences in August, SGX said in a release on Saturday.
An arbitrator in India directed SGX and the National Stock Exchange’s index company, IISL, to facilitate the continued listing of SGX Nifty products for at least two successive contract month maturities after the completion of the arbitration, the release said.
SGX was also directed to not offer any new India equity derivatives products, such as the successor products it had previously announced to replace the SGX Nifty contracts, the statement said.
“Arbitration proceedings are continuing and the hearings on evidence are expected to commence in early 2019,” SGX said, adding it would provide updates “in due course.”
In February, Indian stock exchanges decided to cut off foreign exchanges’ data access for derivatives products in an apparent belief that the foreign exchanges were “stealing” volume to offshore markets that could be settled on the subcontinent. It’s unclear if the move to block overseas derivative use will lead to investors cutting their India exposure or boosting their onshore trade.
In a February note, Goldman Sachs estimated that 10 percent of SGX’s derivatives business revenue comes from the Nifty F&O and rupee futures, which are its two key India offerings.
SGX had planned to list successor products to the Indian derivatives before August, when the license for the SGX Nifty products had been set to expire. The new products were aimed at providing the same ability to manage risk exposure to the Indian capital markets and at transitioning market participants before the SGX’s license deal with NSE was to expire.
But SGX said in May that it would delay the launch of the successor products. That was after an Indian court granted India Index Services and Products Ltd. (IISL), an injunction on May 21 against the launch of SGX’s new products. The Bombay High Court has sent the matter to arbitration.