It’s a momentous day for the Indian Equity Markets tomorrow: the SGX Nifty will be renamed as the Gift Nifty and will be traded entirely from the NSE IFSC-SGX Connect at GIFT City, Gandhinagar. The event, a grand exercise in collaboration between the exchanges of two EM powerhouses, SGX and NSE, will see orders from SGX members being routed to NSE IFSC (a fully owned subsidiary company of National Stock Exchange of India Limited) for trading and execution, with clearing and settlement through NSE IX Clearing Corporation Ltd. and SGX Group’s Derivatives Clearing as the central counterparty.
This new avatar of the SGX NIFTY is the end game to a series of court wrangles that started from around 2018 relating to SGX’s trading of Indian stock related derivatives in Singapore.
The key point
Thanks to this ‘exchange connect’ and the transformation of Indian Equities into a standalone asset class over the last decade, GIFT will see a larger build-up of NSE IFSC members over time.
The loudest cheers on this development have come from the retail investors, which is puzzling because: while the contract volumes have now been brought ‘onshore India’ (well, the GIFT City is physically located in India; but it’s not onshore in the legal parlance of a ‘International Financial Center’, think of an International Financial Center as a Country within a Country) from ‘offshore Singapore’, the GIFT NIFTY will still be out of bounds for the Retail Investor who is a Resident Indian.
