Singapore exchange delays India derivatives launch as leaders meet

The Singapore Exchange is postponing the launch of its India derivatives products after a court in Mumbai ordered a lawsuit filed by National Stock Exchange of India (NSE) against the Singapore Exchange to be settled through arbitration.

Singapore Exchange had intended to launch the derivatives products on 4 June. In a statement issued yesterday, the Singapore Exchange said “This postponement will enable our clients to manage their portfolio risks without interruption. We will reschedule the launch of our new India derivatives products, pending the outcome of the arbitration.”

“SGX will contest the interim injunction and reserves all rights in respect of damages caused by IISL’s action,” the statement added.

The Singapore Exchange adds that it “remains open to a collaborative long-term solution that will benefit Indian markets”.

Clampdown
The dispute comes after NSE and two other Indian stock exchanges in February terminated licences allowing foreign exchanges to offer offshore derivatives tied to India’s benchmark indices to prevent the outflow of funds from the country. These moves come as the Indian government is increasingly looking to clamp down on companies that can remit, under current rules, up to 400% of their net worth abroad. International Investment reported this week on proposed legislation to allow authorities in Delhi to assess companies’ track record for sending funds overseas.

Diplomacy
The dispute with the Singapore Exchange comes as the Indian prime minister, Narendra Modi, is meeting today with his Singaporean counterpart, Lee Hsien Loong, as part of a three-day visit to the city state with the aim of promoting, and improving, commercial ties between the two Asian giants.

ABOUT THE AUTHOR
Christopher Copper-Ind
Christopher Copper-Ind is Editor of International Investment.

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