The National Stock Exchange (NSE) and the Singapore Exchange (SGX) have entered into a formal agreement to cement the key terms for operationalising the NSE IFSC-SGX Connect which will bring together international and Gujarat International Finance Tec-City (GIFT) participants to create a bigger liquidity pool for Nifty products in GIFT City.
Accordingly, both the NSE and the SGX will also withdraw the arbitration proceedings. The two exchanges have recently received further regulatory clarifications from the relevant authorities on the implementation of the Connect, since receiving consent from their respective statutory regulators on the proposed Connect model last year.
Both parties will continue to work with key stakeholders to develop the infrastructure for the Connect and ensure member readiness prior to its implementation.
“Building connectivity across international platforms in Singapore and India will facilitate unfettered access for global market participants, and in turn, enhance investments and capital market flows between India and the world. As Asia’s pioneering central counterparty, the SGX will work with the NSE and stakeholders to develop a connectivity infrastructure that incorporates international best practices and creates new value for existing and new customers,” Loh Boon Chye, Chief Executive Officer of the SGX, said.
“We deeply appreciate the continued support provided by the government and regulatory authorities in India and Singapore. We look forward to broadening participation and deepening liquidity in Nifty products for international participants, as part of the growth of GIFT City,” he added.
Vikram Limaye, Managing Director and Chief Executive Officer of NSE said: “This Connect is one of the key developments for the integration of GIFT City ecosystem with the international financial markets. It would lead to the development of vibrant and liquid markets for India access products at GIFT City with the ease of access to international investors.”
“Our collaboration with the SGX is an important step towards fulfilling the vision of Aatmanirbhar Bharat as envisaged by Prime Minister of India with GIFT IFSC playing a much larger role in the global financial markets,” he said.
The Connect will broaden the international and domestic participant base and further strengthen the capital market ecosystem in GIFT city resulting in more broad-based development across asset classes and capital raising activity.
The two exchanges (NSE and SGX) have been locked in a dispute for the past couple of years after India’s three main bourses unexpectedly announced in February 2018 that they would stop licensing their indexes to foreign bourses from August that year.
NSE’s Nifty futures and options, which are traded in the island nation, are popular with foreign investors who are not keen on trading in India.
An Indian court that year referred the dispute to an arbitrator. The two parties have now reached an agreement for operationalising the NSE IFSC-SGX Connect and thereby withdraw the arbitration proceedings.