NSE sues SGX on its Nifty-based India futures, options

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Mumbai: National Stock Exchange (NSE) has filed a case in the Bombay high court seeking an interim relief on the Nifty-based products that Singapore Exchange in June, said SGX in a statement issued on Tuesday.

“SGX has been notified by the National Stock Exchange of India (NSE) of an application made in the Bombay High Court for an interim injunction on our new products,” said SGX in a statement on Tuesday morning.

An email sent to NSE spokesperson for comments was not answered immediately.

Indian exchanges had on 9 February decided to bar overseas exchanges from trading in Nifty derivatives, including futures and options, in an attempt to check migration of trades away from Indian exchanges. Two months later, on 11 April, SGX announced a new product which works just like the Nifty index, bypassing the Indian exchanges.

The features of the new products are similar to Nifty products so much so that SGX will continue trading Nifty on its platform under another name. The new products are called India futures and India options, and SGX will use the closing Nifty price to settle its new contracts.

“We have full confidence in our legal position and will vigorously defend this action. Our clients can continue to trade per normal,” SGX said in the statement.

NSE’s plea cites Intellectual Property (IP) rights infringement as after technical and legal examination NSE had come to a conclusion that SGX’s products are primarily infringing on copyrighted work,” said a person familiar with the development, he did not wish to be quoted.

“No one has used the entire index’s settlement price. If that continues to happen there would be no sanctity for copyrighted work or IP rights,” he added.

Mint had reported on 16 April that NSE is examining the SGX’s products for legal remedy.

Defending its stance, SGX added that its new India futures and options, which have received the relevant regulatory approvals, will list in June 2018 and allow our clients to seamlessly transition their India risk management exposures.

“Our new India equity derivative products are essential to enable institutional investors to maintain their current portfolio risk exposure to the Indian capital markets. 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,” said Michael Syn, Head of Derivatives, SGX.livemint