CFA Society Singapore
SINGAPORE (May 22): Singapore Exchange (SGX) is facing a potential interim injunction on the India equity derivative products it intends to launch in June this year, but maintains that it nonetheless will continue to list the products as planned.
To recap, SGX earlier announced its intention to launch three derivative products in June 2018 – SGX India futures, SGX India options and SGX India bank futures – to succeed the derivatives it used to offer on India’s benchmark Nifty 50.
The bourse reports in a Tuesday morning filing that it has been informed by the National Stock Exchange of India (NSE) of an application made in the Bombay High Court for an interim injunction on these products.
On this, SGX says it has full confidence in its legal position regarding this matter, and will vigorously defend the injunction while its clients continue to trade as per normal.
According to the bourse, its new India derivative products have already received the relevant regulatory approvals, and will list in June 2018 as planned to allow clients to seamlessly transition their India risk management exposures.
Shares of SGX fell 2.1% on the news, or 16 cents lower, to $7.48 before the midday trading break and stayed that way until the 5pm close.
“SGX has a responsibility to provide risk management tools for our global clients and ensure there is no disruption to the marketplace. Our new India equity derivative products are essential to enable institutional investors to maintain their current portfolio risk exposure to the Indian capital markets,” says Michael Syn, Head of Derivatives, SGX.
“We have, from the onset, expressed to NSE that there is a need to maintain liquidity in the international India equity derivatives market, in order to connect international participants to GIFT IFSC. We remain open to working with NSE and other relevant stakeholders to develop a solution that meets the risk management needs of global market participants,” he adds.