Indian bourses' overseas trading restriction anti-competitive: MSCI

Global index provider MSCI has termed the move by Indian stock exchanges to restrict derivatives trading and data feeds overseas as anti-competitive, as it could lead to unnecessary disruption.
Further, the move could impact India's weightage and its asset classification in the MSCI indices.
It strongly suggested Indian exchanges and markets regulator Sebi to reconsider this unprecedented and anti-competitive step.
This comes after leading stock exchanges -- BSE, NSE and Metropolitan Stock Exchange of India -- on February 9 decided to curb all licensing agreements and stop offering live prices to international bourses.
The coordinated move from the exchanges assumes significance at a time when Singapore Stock Exchange (SGX) has launched trading in single-stock futures in 50 of India's top companies that are part of the Nifty index - a development that has triggered concerns about liquidity moving out of the country.

"The breadth of the restrictions announced by the Indian exchanges is unprecedented in any equity market in the MSCI Emerging Markets Index series.

"MSCI strongly suggests that the Indian exchanges and their regulator Sebi reconsider this anti-competitive action before it leads to any unnecessary disruptions in trading or a potential change in the market classification of the Indian market in the MSCI indices," MSCI said in a late night statement yesterday.
MSCI said it is also in discussion with international investors on the potential change in its indices.
The introduction of restrictive measures that may result in a material deterioration of the accessibility of an equity market is reviewed carefully by MSCI in consultation with international institutional investors and other market participants and could lead to a change in market classification, said MSCI.

Last week, Sebi chairman Ajay Tyagi said that the move by exchanges should not be seen as a "retrograde step".
On February 5, SGX introduced single-stock futures of Nifty 50 companies despite reservations expressed by the NSE.
Prior to the launch by the Singapore exchange, NSE chief Vikram Limaye had flagged such a move would shift liquidity out of the Indian markets.