Infonet may end ties with FTSE/Xinhua over data use
SSE Infonet, an information provider controlled by the Shanghai Stock Exchange, may sever business ties with FTSE/Xinhua Index after it sued the index provider for allegedly breaching contracts, according to sources.
SSE Infonet, 90 per cent held by the exchange, was unlikely to renew its one-year contract with FTSE/Xinhua Index that expires next month, a source close to Infonet said. That would stop FTSE/Xinhua from compiling its A50 Index, which uses Infonet data, the source said.
Infonet earlier sued FTSE/Xinhua Index in a Shanghai court over the use of its data on A shares. It did not give details of the lawsuit but lawyers have said the index compiler did not have the right to create derivatives based on those data.
'However, no action has been taken as we are waiting the court's decision,' said the source, adding a private settlement was possible.
The Singapore Stock Exchange yesterday launched FTSE/Xinhua China A50 index futures contracts, the first such product covering the largest 50 A-share firms. Trading volume was 212 contracts.
'We're pretty happy on the trading volume which shows investors' enthusiasm towards China's equity market,' said Paul Hoff, managing director of FTSE Asia-Pacific. He said FTSE would still offer index products but declined to comment on whether the mainland venture would renew the contract with Infonet.
'Infonet has strong enough arguments to win the case,' said Li Mingliang, a Shanghai lawyer not involved in the case. But the court could only impose its order on FTSE/Xinhua Index, but not on the Singapore Stock Exchange, he said.
The Shanghai Pudong New District Court will hear the case on October 11.
