SGX to Migrate MSCI Taiwan Contracts to FTSE Early

The move is reportedly aimed at avoiding potential operational issues as market uncertainty persists into the end of the year.

SGX (Singapore Exchange) planning to migrate all open positions in its MSCI Taiwan Index futures contract to its newly launched FTSE contracts on 30 October, and then suspend the MSCI product, Bloomberg reports.

The MSCI product was previously set to wind down when SGX’s licence expires in February.

According to SGX Head of Equities Michael Syn, the move is aimed at avoiding potential operational issues as market uncertainty persists into the end of the year, given the US elections and the upcoming holiday period.

This is the first time an exchange will migrate open interest on behalf of customers, he said.

Following the licence expiry, SGX’s arrangement with MSCI will be limited to products based on MSCI’s Singapore indexes.

In August, SGX announced a partnership with FTSE Russell to jointly develop and market derivatives offerings spanning multiple asset classes. The Taiwan contract launched prior to this, in July.

According to Syn, the SGX FTSE Taiwan Index Futures contracts exceeded USD 1.5 billion in total turnover in just the first week of trading, and now account for more than half of the volumes of all MSCI derivatives products trading on SGX, and about 12 percent of overall equity derivatives volumes.

Syn said SGX is also targeting the launch of a derivatives trading link with India by the end of next year. Last month, SGX  entered into an agreement formalising the key terms for operationalising the so-called ‘NSE IFSC-SGX Connect’.

In addition, SGX plans to introduce about five more futures contracts on individual stocks listed in Singapore by Q1 2021, as well as more derivatives linked to REITs and ESG plays.

The exchange launched 10 Singapore single stock futures contracts in July, and in August, it launched two of Asia’s first international REIT futures contracts.