Dhaka, Bangladesh
Turf war

What others say

Turf war

India’s stock exchanges are not too keen on the idea of competing with their global peers. Instead, they are happy to guard the home turf against foreign exchanges that do a better job of finding new clients. On Friday, the National Stock Exchange, the Bombay Stock Exchange and the Metropolitan Stock Exchange of India announced their decision to stop providing data feed and other support to overseas exchanges that list derivatives linked to Indian stocks and indices. Any existing agreement allowing data-sharing with foreign bourses, except that which is related to exchange-traded funds, will expire in six months. Explaining the reason, the statement said offshore derivatives could be causing “migration of liquidity from India, which is not in the best interest of Indian markets”. Given that the volume of derivatives linked to Indian stocks trading in the offshore market is higher than volumes in the domestic bourses, Indian exchanges have enough reason to fear their foreign counterparts. Ambitious endeavours such as the International Financial Services Centre in Gujarat, although yet to gain the patronage of foreign investors, may also benefit from the crackdown on offshore derivative markets. Foreign bourses, however, will likely find other ways to list derivatives linked to Indian stocks and indices without any help from Indian exchanges soon. The present move, thus, is unlikely to rein in the vast offshore market for Indian derivatives. It also leaves a lot to be desired. — The Hindu

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