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The tussle between NSE and SGX – A study.
All the Financial newspapers have been reporting about the squabbles between National Stock Exchange (NSE) and Singapore Stock Exchange (SGX)- two important and big bourses in the world. It is rather interesting to study the arguments and causes for the conflict from the point of view of the consequences.
- The tussle commenced when the three Exchanges including NSE stopped providing data feed to the global exchanges from February 2018,
- SGX initially agreed to work towards a smooth transition of the users of the Nifty products to the exchanges on the GIFT International Financial Centre in Gujarat.
- But NSE unilaterally said in April that it will introduce derivative products called SGX India derivatives replacing SGX Nifty Group of derivatives.
- This was done to facilitate Investors and traders to take positions like earlier. Otherwise SGX might lose chunk of
- This move of SGX derivatives will track Nifty and Bank Nifty traded in NSE but with a dissimilar name with the same types of transactions.
- NSE has filed a case against SGX in Bombay High Court to stop their operations.
- Based on past rulings, opinions differ about the validity of such a case as copyright of traded price, or index is perhaps if challenged is untenable although the unauthorized use of indices of NSE could possibly be In a similar case U S court has ruled out the copyright claim and hence SGX perhaps is taking the cue from this.
- SGX uses the final settlement price by the average of the price of contracts traded on the NSE and in the GIFT IFSC and draws its own reference price thus deflecting the accusation of NSE.
- The move by SGX is viewed as highly unethical by any standards and is most likely to lead to prolonged legal battle. In this process the Investors could be the sufferers.
- This move will bring down the volume and get it fragmented apart from losing revenue by the exchequer.
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