BSE, NSE, MSE to stop trading of their indices on foreign bourses
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.
Additionally, it is possible that Exchanges could also create indices based on their Market Data which could then be licensed to such foreign exchanges and/ or trading platforms, for the purpose of trading and settlement of products based on such indices outside India.
It is 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.
In view of the abov, it has been decided that:
1. Exchanges or their subsidiaries/group entities or any other entity having licensing arrangement with Exchanges shall not license/provide Indian Indices and/or the data including the price of Indian securities to any foreign exchange and/ or trading platforms for trading or settling derivatives in any form in a foreign jurisdiction.
2. Exchanges, either directly or through their subsidiaries/group entities or through third party data vendors, shall not license/provide Market Data including prices of securities traded on the Exchange’s platform to –
b) any Index Provider and / or its licensee, for creation of Indices or products based on such indices, which in part (weightage of 25% or more on Indian securities) or in full are based on prices of securities/indices listed in India or are benchmarked to Indian indices, which may be made available for trading or settling derivatives on any foreign exchanges and/ or trading platforms; and
c) any licensee, either directly or through its subsidiaries/group entities or through a third party data vendor in any form or manner for the purpose of trading or settling derivative products on any foreign exchange and/ or foreign trading platforms. Further, such licensee is also not permitted to use Market Data for the issuance of overseas derivatives instruments and/or structured products on exchange-traded derivative contracts on Indian securities traded on foreign exchanges and/ or trading platforms.
(II)Issuance of any Exchange Traded Funds / Exchange Traded Notes or similar products by any entity, subject to prior written permission of the licensor.
5. The other arrangements if any shall be grandfathered for a period of one month and the exchanges, Market participants, Index providers, data vendors, their subsidiary, group companies or any other relevant party shall ensure that arrangements are terminated or modified to comply with the contents of this press release.
6. End of Day and final settlement prices of securities shall be displayed on the exchange website and forwarded to media organizations, 2 hours after close of the market.