NSE, Singapore bourse to end arbitration case, finalise derivatives tie-up

Singapore Exchange Ltd. and the National Stock Exchange of India Ltd. are formally ending a years-long disagreement related to derivatives trading, with the two exchanges set to launch a cross-border trading link.

Both exchanges will withdraw arbitration proceedings that began after a dispute erupted in 2018 regarding the trading of Indian stock-based derivatives in Singapore, according to a statement from the Singapore exchange. The exchanges have received another round of regulatory approvals on implementing a connect that will allow market participants to trade NSE Nifty 50 Index futures and options contracts from India’s Gujarat International Finance Tec-City.

This is “definitely a positive outcome for SGX as it allows a bigger pool of clients” even though the Nifty products will cease to trade in Singapore once the platform is operational, said Joel Ng, an analyst at KGI Securities (Singapore) Pte.

The dispute between Singapore and India’s exchanges came to the fore in February 2018, when NSE together with other Indian markets said they would end all licensing agreements with foreign bourses to discourage offshore trading. The two revived talks in July that year, which resulted in the proposal of a cross-border trading link for Nifty 50 index derivatives.

 

The exchanges received a set of approved regulatory dispensations from their statutory regulators for the connect last year. The related contracts are currently traded on the Singapore bourse. The launch date for the new NSE IFSC-SGX Connect has not been decided yet.

India, Singapore Exchanges Revive Talks as Regulators Intervene

“SGX will work with NSE and stakeholders to develop a connectivity infrastructure,” the exchange’s Chief Executive Officer Loh Boon Chye said in the statement.

“The connect will broaden the international and domestic participant base and further strengthen the capital market ecosystem in GIFT city resulting in more broad based development across asset classes and capital raising activity,” added Vikram Limaye, NSE’s chief executive officer.