GIFT Nifty: Based in GIFT City, NSE International Exchange IFSC Limited is a division of NSE. The trading of securities in currencies other than the Indian rupee is permitted on stock exchanges operating in the GIFT City.
Have you been following today’s NSE IFSC Nifty 50 index futures? Should you, if not. Before trading on the NSE begins at 9.30 am IST each day, they will provide you with cues regarding the direction of the stock market. The SGX Nifty futures, which halted trading on the Singapore Exchange on June 30, were renamed as GIFT Nifty derivatives and launched on the Nifty International Exchange, or NSE IX, in Gift City, Gujarat.
GIFT Nifty began trading on NSE IX at 6:30 IST. The trading hours for these derivatives would overlap those of Asia, Europe, and the US for a total of around 21 hours spread across two sessions.
Starting at 6.30 am, the first session has started. The event will end at 3:40 p.m. From 4.35 p.m. to 2.45 a.m. the following morning, the second session will take place. This is in contrast to the 16-hour SGX Nifty trading session that took place on the Singapore Exchange from 6:30 am IST to 10:30 pm IST.
A Quick History
In the past, Singapore Exchange and NSE had a licencing agreement that permitted Singapore Exchange to offer trading in Nifty futures and options. But in 2018, NSE cancelled its licencing agreement with the exchange. A derivatives product launch was then announced by Singapore Exchange, which NSE claimed violated its intellectual property rights. After the matter was taken to court, the parties decided to marry in September 2020.
GIFT Nifty to SGX Nifty
NSE International Exchange IFSC Limited, also known as NSE IX, is a GIFT City-based division of NSE. The trading of securities in currencies other than the Indian rupee is permitted on stock exchanges operating in the GIFT City. As a result, the 2017-launched NSE IX provides trading in a variety of items denominated in dollars.
With the full switchover from SGX Nifty to GIFT Nifty, Singapore Exchange has begun routing all orders from international clients to NSE IX for trading and execution, with clearing and settlement handled by NSE IFSC Clearing Corporation through SGX IFSC India Connect, a special purpose vehicle company. The central counterparty in this transaction is Derivatives Clearing of the SGX Group.
In order to put things into perspective, in 2022 the SGX Nifty futures alone produced daily average turnover of $3.9 billion and average open interest of $9.6 billion. The revenue that was previously generated on the overseas market will now be produced locally in Gujarat’s Gift City. Revenues will be shared between NSE and Singapore Exchange. In addition to facilitating access for international market participants in GIFT City, the measure will consolidate the liquidity pool for Nifty instruments in the NSE IFSC exchange.
Investments on the NSE IX are made in US dollars, in contrast to domestic stock exchanges where foreign investors were required to use currency hedges. As a result, NSE IX is currently the only place where all Nifty futures denominated in dollars are traded.
Who may transact in Nifty products at GITY Nifty
According to NSE IX, any trading member who is Indian or foreign, registered or unregistered, and who establishes a branch or subsidiary office can begin trading in GIFT Nifty goods by becoming a member of NSE IX. In Gift City, there are about 50 brokers who have set up shop. They are Motilal Oswal Finsec IFSC Limited, Bonanza Portfolio (IFSC) Private Limited, Anand Rathi International Ventures (IFSC), Antique Stock Broking (IFSC), Nuvama Capital Services (IFSC), Geojit IFSC, SMC Global IFSC Private Limited, and Emkay Global Financial Services IFSC.
Additionally, there were Share India Securities (IFSC) Private Limited, Dolat Capital (IFSC) Private Limited, East India (IFSC) Private Limited, and Ashika Stock Broking (IFSC) Private Limited. These trading members are allowed to carry out deals both on their own behalf and on behalf of their clients.