GIFT NIFTY is a famous Singapore Exchange (SGX) NIFTY began trading from GIFT City in the state of Gujarat on Monday. It executed around 30,000 trades in a solo session.
This is the very first cross-border initiative that connects the capital markets of India and Singapore.
The deal between SGX and NSE
As per a contract spanning five years between SGX and NSE, business is going to be substantially shared on a 50:50 basis. For the business generated by Singapore, the SGX is going to receive a total of 75 percent of revenue. NSE, on the other hand, will be receiving the rest of the 25 percent. For the International Financial Service Centre (IFSC) business, NSE is going to keep a total of 75 percent of the business. The moment a "threshold volume" is hit, a 50:50 basis of sharing will be adopted by both entities.
The first trading session
For GIFT NIFTY, the first trading session was held on Monday. There were 30,000-odd trade volumes, and a total of 90 percent of them were executed via the SGX. NSE IX hopes that international investors will be coming directly to IFSC gradually, rather than routing through SGX.
It is also important to note that NSE IX will be unable to enter into arrangements like these with any other exchange. The contract can be extended for two more years after the span of five years conclude.
What is GIFT NIFTY?
The trade on SGX NIFTY stopped in Singapore on June 30. The entire trading volume switched to GIFT IFSC. It was rechristened GIFT Nifty. At present under the brand of GIFT Nifty, four products are being offered.
How crucial is the switch for India?
It was Prime Minister Narendra Modi who initiated the migration for the first time in July 2022. It was in the month of April of the present year, though, that Singapore assented to a complete switch of Nifty by July 3.
“GIFT Nifty is an important milestone for GIFT IFSC and its outreach towards foreign investors and enhancing the capital market ecosystem in GIFT City… Over the past two decades, SGX has been our bridge to the world. It has linked two of the fastest growing economies of the world,” stated the MD and CEO of the National Stock Exchange, Ashish Chauhan, at GIFT City on Monday.
Boon Chye, CEO, of Singapore Exchange, “This is the first of its kind trading link, with trading and matching in India and clearing and settlement in Singapore.”
Timings
The GIFT NIFTY begins at 6:30 am in the Asia time zone. GIFT NIFTY continues till 3:40 pm. The second session commences from 4;35 pm to 2:45 (the following day). It targets investors from Europe and the U.S.
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