The parties have also entered into a Memorandum of Understanding (MoU) with respect to other areas of potential cooperation, including related to development and distribution of financial products and services.
Under the cross-listing arrangements, the S&P CNX Nifty Index (the Nifty 50), the Indian benchmark index for large companies accounting for 22 sectors of the Indian economy, will be made available to Chicago Mercantile Exchange (CME), for the creation and listing of US dollar denominated futures contracts for trading on CME.
Moreover, the rights to the S&P 500 and Dow Jones Industrial Average (DJIA) will also be made available to NSE for the creation and (subject to regulatory approval) listing of Rupee-denominated futures contracts for trading on NSE.
The license to the Nifty 50 from NSE’s affiliate India Index Services & Products (IISL), which is exclusive to CME Group within the Americas and Europe, is in addition to the existing licensing arrangement between Singapore Exchange (SGX) and IISL.
The sublicenses to the S&P 500 and DJIA indexes, which are exclusive to NSE for Rupee-denominated futures contracts traded within India, are being made available via sublicenses from CME Group and each of Standard & Poor’s and Dow Jones, respectively.
Ravi Narain, MD and CEO of NSE, said: “This association with CME Group will make the Nifty 50, and, over time, potentially other products across various India-related asset classes, available to a much larger community of traders and investors. At the same time, investors in India will have access to new exchange traded products that reflect some of the world’s most widely traded equity indexes. This will improve portfolio choice for Indian investors by widening the array of assets that they can hold in their portfolios.”
Craig Donohue, CEO of CME Group, said: “Our new partnership with NSE is an integral part of our global growth strategy. In addition to our existing partnerships or investments in Brazil, Dubai, Korea, Malaysia, Mexico and Singapore, our NSE partnership will further expand our customers’ access to the most actively-traded foreign markets, while also increasing access for global investors from within these regions to CME Group products and services. As the world’s 12th largest and one of the most rapidly growing economies, India is an important part of our efforts to develop strategic partners in key growth markets.”
Alexander Matturri, executive managing director at S&P Indices, said: “S&P Indices has a successful, twenty-seven year relationship with the CME Group in the US futures market, and a strong ten year association with the NSE in developing stock market indices in India. We are certainly pleased to be working with both of our longtime exchange partners to help Indian investors gain greater access to the US equity markets as determined by the S&P 500, an index with nearly $1 trillion directly indexed to it.”
