NSE-SGX rift deepens with NSE seeking injunction before the Bombay High Court

NSE-SGX rift deepens with NSE seeking injunction before the Bombay High Court

Varun Marwah

The National Stock Exchange Ltd (NSE) has dragged the Singapore Exchange Ltd (SGX) to Bombay High Court over the latter’s plan to launch Nifty-based products beginning June.

The petition has been filed by India Index Services and Products Limited (a subsidiary of NSE), which provides indices and index-related services to NSE, against Singapore Exchange Derivatives Trading Ltd. and Respondent and Singapore Exchange Securities Trading Limited.

The petition has been filed under Section 9 of the Arbitration and Conciliation Act. This provision allows parties to an arbitration to seek interim reliefs,  which in this case was maintaining status quo, during the pendency of proceedings.

Justice S.J. Kathawalla of the Bombay high court admitted the matter on Tuesday and restrained the SGX from launching new derivative contracts until further notice.

The SGX in April said that it will migrate all Nifty and Bank Nifty positions of its clients to new contracts that will be settled every month on publicly available information. These new contracts stem from the February 9 decision by the National Stock Exchange, the Bombay Stock Exchange, and another bourse to halt providing data to foreign exchanges to prevent trading volumes from moving offshore.

Alleging violation of existing license agreement between, NSE sought an interim relief from the court to stop the launch of these products. According to the petitioners,

these New Derivatives Contracts are identical to certain products (SGX Nifty 50 Index Futures, SGX Nifty 50 Index Options and SGX Nifty Bank Index Futures), which were licensed under the License Agreement and proposed to be launched on the Respondent’s platform despite issuance of the termination notice of the License Agreement by the Petitioner.

SGX in a press release said,

We have full confidence in our legal position and will vigorously defend this action. Our clients can continue to trade per normal. Our new India derivative products, which have received the relevant regulatory approvals, will list in June 2018 and allow our clients to seamlessly transition their India risk management exposures.

The court will hear the matter today.

(Read the order)

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