February 12, 2018 / 9:29 AM / 10 months ago

BREAKINGVIEWS-India's offshore trading assault might pay off

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

By Una Galani

MUMBAI, Feb 12 (Reuters Breakingviews) - Local exchanges will no longer share data with foreign rivals. This move, which is especially painful for Singapore, looks protectionist and will irritate some investors. The higher volumes for Indian exchanges, and a potential tax boost to New Delhi, could make it worthwhile.

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- Shares of Singapore Exchange fell sharply on Feb. 12 after India’s stock exchanges said that they would no longer provide data on local indexes to foreign bourses.

- A joint statement on Friday from the BSE, the National Stock Exchange and the Metropolitan Stock Exchange said the shift was because large amounts of offshore derivatives trading had led to “the migration of liquidity from India”.

- Foreign markets offer dollar-based derivatives on Indian indexes, shares and other securities under licensing agreements, allowing investors to gain exposure to India without having to trade onshore.

- Singapore’s exchange, known as SGX, is the main provider. Derivatives based on the Nifty indexes are traded in Singapore, Chicago, Japan and Taiwan, the NSE said in its last annual report.

- SGX shares fell 7.4 percent to S$7.31.

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Editing by Katrina Hamlin and Quentin Webb

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