Prime Minister Narendra Modi launched the NSE IFSC-SGX Connect, a joint venture between the National Stock Exchange of India (NSE) and Singapore Exchange (SGX) at the Gujarat International Finance Tec (GIFT) City, Gandhinagar on Friday. The new platform will enable global investors to trade in dollar-denominated Nifty futures contracts available on the Singapore Exchange (SGX) in GIFT City. Investors will also have real-time access to NSE IFSC market data.
Union finance minister Nirmala Sitharaman, Gujarat CM Bhupendra Patel, SGX Group CEO Loh Boon Chye and NSE MD & CEO Ashishkumar Chauhan were among those present during the launch.
The platform will lead to orders from SGX’s trading members being routed through the International Finance Centre for trading and execution, said an NSE release. The clearing and settlement process will happen through NSE IFSC Clearing Corporation and SGX Group’s Derivatives Clearing as the central counterparty, it said.
Foreign banks and institutions such as Deutsche Bank, Morgan Stanley Asia (Singapore) Securities OCBC Securities, Orient Futures International (Singapore), Phillip , StoneX Financial, and UBS AG have onboarded NSE IFSC-SGX Connect, the release said.
Nifty contracts on SGX are popular among foreign investors who do not wish to register and trade in India. At its peak, trading in the Nifty contributed as much as 10% to the Singapore bourse’s revenue. In early 2018, India’s stock exchanges decided to stop licensing their indexes to foreign bourses from August 2019 amid concerns over the flight of trading activity by foreigners to Singapore.
SGX dragged NSE into a legal dispute after the termination of the agreement. The issue finally went to arbitration. Both exchanges withdrew the arbitration in September 2020 after they decided to enter a connectivity pact at Gift City.
Nifty Futures volumes in Singapore are nearly 80% more than in India. In 2021, an average daily volume on NSE was ₹14,500 crore compared to ₹26,000 crore in SGX. Foreign portfolio investors (FPIs) had shifted their positions to Singapore due to more favourable taxation and preference for a dollar-denominated product.
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