Voting with the feet may be a tiresome affair, but investors never tire of resorting to it when faced with uncertainty on the regulatory front.

A case in point is the back and forth between the National Stock Exchange (NSE) and Singapore Exchange (SGX) on the fate of the Nifty futures contract listed at Singapore. Since the drama began a little over a year ago, outstanding positions in SGX’s Nifty futures contract have more than halved. If its Indian counterpart thought that investors exiting SGX would migrate to NSE, they were gravely mistaken. Open interest of NSE’s near-month Nifty futures contract has fallen by about 30%.

(Naveen Kumar Saini/Mint)

Reports that the two exchanges are very close to signing a new sort of collaboration, involving NSE’s fledgling international exchange at GIFT City, haven’t brought much comfort either. Outstanding positions are down about 26% on SGX from July, which is when the exchanges and their regulators said a new agreement was being worked upon.

Perhaps, given the bad blood between the two exchanges, they would rather wait and look for concrete steps, as well as proof that the proposed new structure can work seamlessly.

If the connect works, it may help boost volumes at GIFT City, but that may be an optical boost at best. Given India’s regulatory flip-flops, it looks unlikely that foreign traders will leave markets they are accustomed to and set up shop in India’s so-called international exchanges.

In this instance, they would continue to post orders and collateral with SGX, which will then send them across to the GIFT City venue. If this was the little victory the Indian side was chasing, it begs the question whether the disruption of a well-functioning market was necessary.