A $7.5 billion derivative trade is being transferred to India from Singapore as the cross-border trading link between the two countries’ top bourses becomes fully operational on Monday.
The National Stock Exchange of India (NSE) and Singapore Exchange (SGX) have resolved their five-year feud. They resolved the disagreement over the introduction of single-stock futures trading on shares of major Indian companies. The NSE argued that SGX’s plans would violate its own rules. They claimed that the plans could lead to market manipulation. SGX, on the other hand, claimed that its plans were legal. SGX believed that their plans would enhance liquidity in the Indian markets.
The relocation of the $7.5 billion derivative trade to India represents a significant triumph for the NSE. It demonstrates the NSE’s ability to attract trading activity back to India from global financial centers like Singapore.
Moreover, this move is expected to enhance the liquidity of the Indian markets. Nifty futures and options contracts are highly active in India, and the inclusion of Singapore-based investors in the trading pool is likely to increase trading volume and market efficiency.
The transfer of the derivative trade to India also highlights the growing importance of the Indian financial markets. India, the world’s fastest-growing major economy, is progressively integrating its financial markets with the global financial system.
Furthermore, this move is likely to enhance India’s appeal as a destination for foreign investment. It demonstrates India’s commitment to establishing a fair and transparent regulatory environment for investors.
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