The NSE IFSC-SGX Connect, on Monday, unveiled the new identity of GIFT Nifty, which will replace the existing SGX Nifty Futures & Options contracts from July 3, 2023 after a switch from Singapore Exchange (SGX) to GIFT IFSC in GIFT City, Gandhinagar.

From June 30, the entire trading of SGX Nifty will cease to operate at SGX and the entire volume will shift to GIFT IFSC from July 3. The entire Open Interest at SGX Nifty will shift to GIFT Nifty. “We already have over 60 brokers registered and some 40-50 are in the pipeline of finalising. GIFT Nifty will be a catalyst to make GIFT City a price setter for largest traded instruments in the world,” said Ashishkumar Chauhan, MD and CEO, NSE.

This will enable USD-denominated Nifty derivatives trading at NSE IX under the regulatory framework of International Financial Services Center Authority (IFSCA). The GIFT Nifty orders placed by SGX members will be routed to NSE IX for trading and execution with clearing and settlement through SGX Derivatives Clearing.

Also read: SGX Nifty will cease to exist after June: What traders need to know

The trading in GIFT Nifty F&O contracts will commence on July 3 with trading time of 21 hours spread between two sessions, the first session of nine hours starting at 0630 IST till 1530 IST. After a break, the second 12-hour session begins at 1545 IST and will continue till 0245 IST the next day, informed V. Balasubramaniam, MD and CEO, NSE IX (NSE International Exchange IFSC Ltd). The trade timing covers the trading hours of Asia, Europe, and US.

Currently, SGX Nifty has 16-hour trading session starting at 0630 IST till 2230 IST. The domestic Indian capital markets take a cue from the SGX Nifty before the opening at 0915.

Initially, the derivatives contracts for GIFT Nifty 50, GIFT Nifty Bank, GIFT Nifty Financial Services, and GIFT Nifty IT on NSE IX will be available under GIFT Nifty suite. Gradually, other indices will be rolled out under Gift Nifty, the officials said.

Also read: Global shippers come calling at GIFT City’s IFSC

Enabling a replacement to P-Notes

Injeti Srinivas, Chairman, IFSCA termed it a historic moment for the exchanges at GIFT IFSC - an SEZ area under the GIFT City.

“By virtue of NSE Connect, we are able to reach out to all those global investors who are not directly engaged in the Indian capital markets. Parallelly, there are initiatives underway to see that global investors directly also engage with the Indian capital markets through these international exchanges at GIFT IFSC, said Srinivas.

“We are looking at potential of sponsored depository receipts (SDRs) and unsponsored depository receipts (UDRS) in Indian stocks, which is once enabled, will be very beneficial for IFSC in terms of volumes and for the country also. Today, a lot of foreign investors are not very keen to enter Indian capital markets and comply with the requirements, hence are engaging with the capital markets through FPIs and through P-Notes. But once you have SDRs and UDRs, we expect that it will gradually replace the P-Note route and also add a lot of transparency and visibility to the capital markets,” Srinivas said.

Notably, in July 2022, the Prime Minister Narendra Modi had inaugurated the NSE-SGX Connect set-up in collaboration between India’s National Stock Exchange (NSE) and Singapore’s Singapore Exchange Limited (SGX) and the first trade took place in July 29, 2022.

Also read: PM Modi inaugurates Deutsche Bank’s IBU at GIFT-IFSC 

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