GIFT Nifty: The New Identity For SGX Nifty From July 3
Derivative contracts of Indian equities that have so far been traded in Singapore will shift to India from Monday, as the NSE International Exchange launches the GIFT Nifty.
The SGX Nifty, which is the futures traded on the Singapore Exchange on India's NSE Nifty 50 Index, will be known as GIFT Nifty from Monday. Also, outstanding orders will be transferred to the GIFT City in Gandhinagar, Gujarat.
The NSE International Financial Service Centre, a wholly-owned subsidiary of NSE, and the Singaporean Stock Exchange have a formal arrangement called the NSE IFSC-SGX Connect. This agreement allows NRIs and foreign investors to trade Indian stocks.
This latest development is the culmination of a five-year-old dispute between the National Stock Exhchange of India and the Singapore Exchange. The NSE had opposed the Singapore Exchange's plan to launch single-stock futures trading on the shares of some of India's largest companies.
SGX and Nifty will be splitting costs and revenues “roughly 50-50,” Michael Syn, SGX's head of equities, said in an interview with Bloomberg. The trading of futures and options will happen in the GIFT City while SGX will do the clearing, according to Syn.
Products Offered
Market participants would have access to four products under the GIFT Nifty umbrella brand: Gift Nifty 50, Gift Nifty Bank, Gift Nifty Financial Services, and Gift Nifty IT derivative contracts. According to officials, all derivative contracts will be dominated by the US Dollar and other indices will be introduced gradually.
Trading Details
The trading session will span 21 hours, covering the US, European, and Asian trading sessions. The morning session will begin at 6:30 am and go until 3:40 pm IST, and the evening session will begin at 4:35 pm and last until 2:45 am IST.
A 1:1 conversion ratio will be used to transfer the current open interest of the SGX Nifty to the NSE IFSC NIFTY at the time of transition. One original SGX NIFTY position will be equal to one new NSE IFSC NIFTY position. Additionally, in this liquidity switch, the SGX will eliminate all applicable clearing fees and position transfer fees for the SGX NIFTY and NSE IFSC NIFTY.
The volume of SGX Nifty 50 Index futures stood at 1,565,47 as of June 26, 2023.
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