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Trading of SGX's Nifty contracts to continue beyond August: court arbitrator

THE Singapore Exchange (SGX) was granted a licence extension by a court-appointed arbitrator to continue the listing and trading of SGX Nifty contracts beyond the previous August deadline.

As part of ongoing arbitration proceedings, the SGX and India’s National Stock Exchange (NSE) were ordered to facilitate the continued listing of SGX Nifty products for “at least two successive contract month maturations beyond the arbitration’s completion date”.

However, SGX was directed to refrain from offering any new India equity derivative products until a final decision has been made.

Arbitration proceedings are continuing and the hearings on evidence are expected to commence in early 2019.

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The dispute between the SGX and the NSE started when the India’s three national exchanges said in February that they would end all licensing agreements and stop offering live prices to overseas venues.

The move was seen as a blow to the trading business of SGX’s Nifty 50 futures contracts, as the SGX has become the most popular market for investors to hedge their exposure to the Indian equity market.

The Nifty 50 futures tracks 50 Indian stocks on the NSE’s main index, and remain the third most actively traded derivative contracts found on SGX after the FTSE China A50 Index futures and the MSCI Taiwan Index futures.

In response, the SGX had said it would launch an alternative set of products to its flagship Indian equity derivative products on June 4.

But this was met with an interim injunction filed by the India Index Services and Products Ltd (IISL), a subsidiary of NSE.

The SGX has been engaged in proceedings in the Bombay High Court since May 23.

The Monetary Authority of Singapore had previously weighed on the issue. A spokesman had said that the ongoing commercial dispute over SGX's plan to launch new India equity derivative products is disruptive for international institutional investors in Indian equities, and called on all parties to work together to find a “speedy resolution”.