New Delhi : Stock exchanges on Friday said they will stop the trading of indices of Indian securities on foreign bourses as part of a joint effort to stymie migration of liquidity to overseas markets.
The decision of the three exchanges — BSE, NSE and Metropolitan Stock Exchange of India (MSEI) — came after Sebi asked them to suspend trading of their indices in international markets, officials close to the development said. The coordinated move from the bourses assumes significance at a time when Singapore Stock Exchange (SGX) has launched trading in single-stock futures in 50 of India’s top companies that are part of the Nifty index — a development that has triggered concerns about liquidity moving out of the country.
“The existing licensing agreements for licensing indices/ prices of Indian securities for trading derivatives on foreign exchanges and/or trading platforms shall be terminated with immediate effect,” the bourses said in a joint statement.
The termination of pacts would be subject to notice periods required in respective licensing pacts. It has been observed that for various reasons the volumes in derivative trading based on Indian securities, including indices, have reached “large proportions in some of the foreign jurisdictions, resulting in migration of liquidity from India, which is not in the best interest of Indian markets”, the statement said.
