A significant development to establish GIFT City as a fast-emerging global financial hub and position India as a prominent power in international finance
Our Bureau
Gandhinagar
Much awaited, Singapore’s SGX Nifty started trading as Gift Nifty from Gujarat’s GIFT City starting 3rd July 2023. On its first day, almost USD 9.4 billion open interest was transferred to the new entity, and USD 1.12 billion volume was transacted in the first session of trading.
This is a major milestone for Indian markets with the full-scale transition of SGX Nifty to Gift Nifty, presenting international investors an opportunity to invest in Nifty products through NSE IX at GIFT City. A bell-ringing ceremony marked the occasion as SGX Nifty was transferred to Gift Nifty.
“Earlier some portion of our trading had gone offshore, and now it is coming onshore in a different jurisdiction, which is GIFT International Financial Services Centre (GIFT IFSC). It is a great day and gives us a tremendous feeling of how ISFC will operate in the future,” said Ashish Chauhan, MD and CEO of the National Stock Exchange (NSE).
“It marks a tectonic shift, and we are in some sense achieving what we call onshoring the offshore. What was being discovered offshore is now being discovered onshore in our own market,” said V Balasubramaniam, MD and CEO, of NSE IX.
This is a big milestone to democratize the market with many Indian participants, who were eligible under the overseas direct investment (ODI) rules of the RBI, now can set up subsidiary firms in the IFSC and can participate in this trading, Balasubramaniam said.
“It is a revenue-sharing model, in which Singapore will keep 75% of the business it brings and pass on 25%. NSE will keep 75% of whatever is generated additionally from IFSC and India. It is applicable at the threshold value level, which is one year average,” Balasubramaniam said.
Spread over 21 hours, beginning from 6:30 am and going till 2:45 am the next morning in two sessions, entire trading will happen in the US dollar. On the first day of full-scale transitioning, things went smoothly with a USD 1.12 billion trade volume achieved.
Initially, Gift Nifty 50, Gift Nifty Bank, Gift Nifty Financial Services, and Gift Nifty IT derivative contracts are available for market players on NSE IX, other indices will be rolled out in a phased manner under the Gift Nifty suite. This will help facilitate seamless access to global markets, with overlapping Asia, Europe, and US trading hours. Gift Nifty offers a single pool of liquidity and a venue to access USD-denominated Nifty derivatives, to position India as a vibrant financial powerhouse.
Tapan Ray, GIFT City MD, and Group CEO termed it a significant development as it not only fortifies GIFT City’s stature as a fast-emerging global financial hub but also aligns impeccably with the visionary aspirations of Prime Minister Narendra Modi to position India as a preeminent position in international finance.
