SGX-NSE Connect all set to start operations at GIFT-IFSC

Rutam Vora Ahmedabad | Updated on April 07, 2021

SGX’s offshore office inauguration scheduled for April-end

The Singapore Stock Exchange (SGX) is all set to start its offshore office in India at the International Financial Services Centre (IFSC) at GIFT City in Gandhinagar, thereby paving the way for trading of globally popular products such as SGX Nifty Futures on Indian soil through the IFSC platform. This brings an end to nearly two years of wait since August 2019 when the announcement was made that Singapore Exchange-National Stock Exchange (SGX-NSE) Connect will be set up at GIFT-IFSC.

On Monday, a high-level delegation led by Singapore’s High Commissioner, Simon Wong, met Gujarat Chief Minister Vijay Rupani in Gandhinagar to invite him for the inauguration of SGX’s offshore office by April end, an official statement informed here.

Simon Wong expressed confidence that the SGX office at GIFT-IFSC will encourage many more subsidiary companies from Singapore to establish offices at GIFT City.

Luring investors

The development has brightened the prospects for GIFT-IFSC to attract global investors for popular trading products such as SGX Nifty Futures on Indian soil. So far, there has been no formal announcement on the products to be offered on the SGX-NSE Connect.

In August 2019, during his visit to GIFT-IFSC, SEBI Chairman Ajay Tyagi, commenting on SGX-NSE Connect programme on IFSC platform, had stated that the IFSC platform would bring to Indian soil Indian products that are traded in other countries, thereby enabling, “a single pool of liquidity of the Nifty contract in GIFT City as opposed to having fragmented liquidity in India and Singapore.”

Analysts are optimistic about attracting a significant share of the trading happening on the SGX in Singapore. The Indian market product, that is, Nifty Futures, was seen generating more business on the SGX than at the NSE. Non-resident Indians and Foreign Institutional Investors preferred the SGX due to the tax concessions and the relaxed norms and compliance requirements.

“The business, which should have come to India, went to Singapore. In that context, this is a big development for investors and for the GIFT City. Nifty Futures trading in dollar terms on SGX-NSE Connect platform, which is currently on SGX will eventually, move significant business out of SGX in Singapore to this centre. If this product comes to GIFT-IFSC, then it will be an important step as Nifty Futures is an extremely popular trading instrument on SGX also,” Devarsh Vakil, Deputy Head of Research, HDFC Securities, told Businessline. “If successful, this product has the potential to put GIFT-IFSC into a different orbit altogether,” he added.

Chief Minister Vijay Rupani said the Government is looking to establish GIFT City as a world-class centre for financial and technological companies on the lines of Singapore and Dubai.

Published on April 06, 2021

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