Home / Markets / NSE IFSC-SGX Connect commences operations

MUMBAI: The much awaited NSE IFSC-SGX Connect at Gujarat International Finance Tech City (GIFT City) commenced operations today.

"The Connect is expected to go live in July 2022, with the onboarding of SGX Group’s members," NSE said in a press statement.

This so-called Connect is a framework between NSE's subsidiary in GIFT International Financial Services Centre (IFSC) and Singapore Exchange. Via this connect, clients, investors and trading members of SGX who used to trade in NSE listed Indian securities through SGX would now trade in these securities through NSE IFSC.

This will help in transitioning the liquidity pool away from SGX to India's so-called foreign jurisdiction. IFSC is a tax holiday zone, at par with finance centres in Dubai, Singapore, Hong Kong. However, the contracts will be settled at the exchange where the investors are coming from. Meaning in the initial years the revenue from these trades will mostly go to SGX.

On Monday, the two exchanges successfully introduced Negotiable Large Trades (NLT) from Singapore Exchange (SGX Group) in GIFT City. NLT is an off-market trading facility that allows trading participants or their clients to arrange and transact orders of a defined large size away from the trading system.

NLT for Nifty Futures would be in the lot size of 50.

"This is the first phase in the operationalization of the NSE IFSC-SGX Connect which is expected to contribute significantly to the development of markets in GIFT City," NSE said.

The foundation for the Connect was laid in August 2019 when National Stock Exchange of India and SGX Group entered into a collaboration agreement to create a unified liquidity pool for NIFTY products in GIFT City via an innovative Connect model.

NSE IFSC started operations in 2017 and by May 2022 they have 60 officials working on the payroll.

"NSE IFSC has a full-fledged office at Gift city and resources are operating from Gift city," a spokesperson for NSE IFSC said.

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