NSE sues Singapore bourse over futures listing row

The dispute follows the closure of offshore derivatives trade by Indian bourses in February and the ending of agreements that allowed offshore derivatives, leaving SGX and others scrambling. India’s national exchanges said they would end all licensing agreements with overseas bourses and also stop providing live prices.

NSE is trying to stop its Singapore counterpart from launching derivatives that could replace the Nifty 50 contracts that have traded in the city-state for 18 years. 

The Singapore Stock Exchange said it would, however, list new Indian derivatives in June, despite the National Stock Exchange applying for an interim injunction on its trading.

Global funds use these instruments to hedge their positions in one of Asia’s biggest equity markets. 

“This is a big mess,” said David Shin, Asia head of global equity derivative sales at TD Securities in Singapore. “I can’t see how SGX would go through with the launch when this is in the air. There’s a lot of gray here, because if investors do trade the new contract knowing this legal case is out there, is there legal liability that cuts through to the investors of the new contracts?”

SGX, which announced the NSE’s legal action in a statement on Tuesday, said it has “full confidence” in its legal position and would “vigorously” defend itself.

The Singapore bourse’s stock tumbled on news of the lawsuit, falling the most since 4 April. The Mumbai high court is expected to hear the case tomorrow.

NSE, on the other hand, is trying to increase access to international investors by increasing trading hours and allowing US clients to trade.

US regulators last week approved allowing NSE members to accept American customer funds for trading in futures and options contracts on the Mumbai bourse.