MSCI calls exchange data restriction anti-competitive, says could impact India weightage


Mumbai: Global index provider MSCI, in a press statement issued late on Thursday night, said that it considers the move by Indian stock exchanges to restrict data feeds as anti-competitive and it could impact India weightage and India asset classification in its indices.

“The breadth of the restrictions imposed by Indian exchanges is unprecedented in any equity market in the MSCI Emerging Market Series,” said the index provider in the press statement.

“MSCI strongly suggests the Indian exchanges and their regulator Securities and Exchange Board of India (Sebi) reconsider this unprecedented and 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 Indexes,” the index provider added.

India’s top two stock exchanges—National Stock Exchange of India Ltd (NSE) and BSE Ltd—on 9 February terminated agreements that allowed their index derivatives to be traded on overseas exchanges and data vendors from providing data to entities which would use it to trade on overseas exchanges.

This holds true for index providers such as MSCI too, if any of its indices gives more than 25% weightage to Indian securities. MSCI Emerging Market Index has given 9% weightage to India. Most of the international interest in India, and inflows, comes through it. MSCI India has over $9.2 billion in total assets under management for MSCI India family ETFs.

While an NSE spokesperson was not immediately available for comments, BSE declined to comment. Meanwhile, a person familiar with matters in the Indian exchanges said, on the condition of anonymity, that they have had conversations with MSCI in the past week.

“We have had conversations with MSCI and we have assured them on our thought process. This won’t impact MSCI emerging markets which carries a 9% weightage to India as it is too broad to lead to any meaningful decisions by investors,” he said.

MSCI 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.livemint