The Singapore Exchange will list new derivative products tied to Indian equities in June, the bourse operator said in a statement today.
These new products will replace SGX’s existing Nifty futures, which face an uncertain future after August following a decision by India’s stock exchanges to stop supporting offshore derivatives linked to their benchmark indices.
The bourse said the new derivatives “will provide market participants with continuity and the ability to seamlessly transition their current India risk management exposures”. They will also add to the existing India single-stock futures offering launched on the Singapore market on Feb 5., the statement said.
The National Stock Exchange of India Ltd., together with other Indian bourses, late on Feb. 9 said they would end all licensing agreements and stop offering live prices to overseas venues. The decision was aimed at discouraging offshore trading and promote a tax-free business hub in Prime Minister Narendra Modi’s home state Gujarat.
The move was criticised by MSCI which had said that if the changes are put into effect “the result will be disruptive and harmful to international institutional investors in Indian equities.”
Meanwhile, SGX said that it is still working with its Indian counterpart, the NSE, to evaluate a joint trading and clearing model in Gujarat International Finance Tec-City (GIFT City).
“While implementation is not feasible before the expiry of the licence agreement with NSE, SGX remains committed to engagements with NSE and other relevant stakeholders in India towards a collaboration in GIFT City,” the Singapore operator said.