April 20, 2023
The Singapore Exchange recently announced that the NSE IFSC-SGX Connect at the International Financial Service Centre (IFSC) in Gujarat International Finance Tec-City (GIFT City) will become operational on July 3, 2023. This comes after the transition of SGX Nifty derivatives to NSE IFSC, allowing investors in GIFT City to trade SGX dollar-denominated Nifty futures contracts and obtain real-time NSE IFSC market data.
NSE IFSC, a wholly-owned subsidiary of the National Stock Exchange of India (NSE), is an exchange at the IFSC in GIFT City, Gujarat. The NSE IFSC-SGX Connect will launch with the transition of SGX Nifty derivatives to NSE IFSC on July 3, 2023, as per a circular released by the Singapore Exchange.
Trading members were advised by the Singapore Exchange that NSE IFSC would only trade US dollar-denominated Nifty derivatives contracts after the transition. The exchange will carry out a liquidity swap for specific futures contracts after the close of business on June 30 in order to get ready for the transition for SGX members to trade on the NSE IFSC-SGX Connect. By July 3, this liquidity transfer would be finished.
All open positions in SGX Nifty that are not netted off in post-trade on June 30 will automatically be transferred to NSE IFSC Nifty by SGX as part of the liquidity changeover. This will result in no open interest left in SGX Nifty after the movement of all open positions to NSE IFSC Nifty. Following the close of the June 30 trading session, the SGX Nifty will no longer be traded.
The Singapore Exchange also announced that it will delist the SGX Nifty at a later time, subject to the proper regulatory procedure. Market participants who do not want their SGX Nifty to be transferred to NSE IFSC Nifty by SGX can clear down any open positions in SGX Nifty before the end of the trading session on June 30, or make the transition themselves through open market trading.
This transition is expected to provide an opportunity for investors in GIFT City to expand their Investment portfolios and take advantage of real-time market data, leading to a boost in trade and investment between Singapore and India. Overall, this is a significant step towards strengthening the financial ties between the two countries and enhancing the growth of the financial sector in India.
