Singapore Exchange Ltd. and National Stock Exchange of India Ltd. have abandoned talks on a cross-border trading link, according to people familiar with the matter, amid a bitter court battle that’s soured an 18-year partnership. The companies couldn’t reach consensus on issues including timing, regulatory guidelines and the resources required for the project, according to the people, who asked not to be identified because the talks were private.
The venture would have seen traders in Singapore buy and sell derivatives on exchanges in the Gujarat tax-free zone known as Gift City. Officials from NSE and SGX declined to comment. A months-long quarrel between the two exchanges over data and licensing rights escalated last week when NSE sued to stop SGX from launching derivatives based on Indian stocks next month. The dispute, which threatens an alliance that began in 2000, has already heralded the end of Nifty 50 Index futures in Singapore and left international investors hunting for a way to hedge their exposure to one of Asia’s largest markets.
Tensions between the companies erupted in January, when NSE asked its counterpart to delay plans to introduce single-stock futures that would track some of India’s largest companies. SGX rebuffed the request, and on Feb. 9 India’s three national exchanges said they’d cancel their offshore pacts, which meant that Singapore could no longer offer the popular Nifty 50 contracts, the last of which will expire in August.
Linking Singapore to Gift City could have been a compromise solution, providing offshore access to onshore markets, similar to Hong Kong’s stock connects with exchanges in China. NSE wanted its Singapore counterpart to speed up its efforts for the project, but SGX chose to ready new contracts to replace the Nifty 50 futures. Officials in Singapore didn’t believe the link would be ready for months, one of the people said. While NSE offered SGX a six-month extension to its Nifty 50 licensing agreement, SGX ultimately declined amid concerns over client privacy in Gift City, the people said.
The move to launch new products in Singapore led to the NSE lawsuit, which seeks to derail the scheduled June 4 start. The next hearing in the case is set for May 31, with an injunction in place until then against SGX.