INSUBCONTINENT EXCLUSIVE:
By Andy MukherjeeThe path to ending the custody dispute between the National Stock Exchange of India and Singapore Exchange Ltd
passes through a parable involving three kids and a flute.
A minor domestic quarrel has turned into a major court battle over who gets to
trade the benchmark Indian index.
The Indian side wants exclusive rights over the Nifty 50
A judge in Mumbai recently ordered the partners to stay married at least for the rest of this year while an arbitrator tries to find a
This is a chance both parties should grab to prevent a messy, expensive divorce.
To begin with, Singapore should drop its plan to launch a
Yes, it was forced to come up with an alternative after the NSE abruptly decided to stop sharing proprietary index data for trading in any
NSE gave SGX six months to wind up the SGX Nifty
futures (instead of real-time Nifty index values) embarrassed the Indian side
Hence, the court injunction.
Instead of lawyers, it would help if politicians stepped in.
To see why, consider a little fable in economist
Despite investors having been shaken by the fight between the two exchanges, the most active June contract on SGX Nifty has 1.4 times as
Starting in 1968, when the city-state persuaded global banks to trust it with dollar deposits when New York was off to dinner and London
slept, Singapore has made big investments in its legal and regulatory architecture
Even with all that skill and reputation, SGX has managed to hit pay dirt with only a few of the many products it has tried: The FTSE China
A50 Index and the SGX Nifty are its signature pieces.
However, when it comes to taxation and regulation, the Indian side is still capable of
striking the odd jarring note
investors.
NSE represents the claims of both Carla and Bob
Only political diplomacy can ensure a harmonious solution.
One way that can happen is if NSE renews its license agreement with SGX on the
The two sides began exploring a link last year before Singapore hastily announced its own suite of single-stock futures on Indian companies
A stock connect, such as between Hong Kong and Shanghai, could be the prize
It would, however, require a lot of work.
Investors should be able to see the combined order book in both India and Singapore
A trade placed by a hedge-fund customer of, say, Goldman Sachs Group Inc
or Credit Suisse Group AG in Singapore, has to be routed by SGX to this enlarged liquidity pool
Trade clearing must be guaranteed by a well-capitalized institution
The yet-to-be-appointed regulator for Gift City has to allay lingering concerns around investor anonymity and money-laundering
Futures traded on SGX last year, triple the volume of SGX Nifty
