- The GIFT NIFTY (previously known as the SGX NIFTY) began trading from GIFT City in Gujarat, marking the first cross-border venture between India and Singapore’s financial markets.
- Over 30,000 deals were executed throughout the trading session, demonstrating the growing importance of this relationship.
What exactly is GIFT NIFTY?
- PM Modi launched the transition to GIFT NIFTY in July 2022.
- GIFT NIFTY is critical in broadening the reach of GIFT IFSC to overseas investors and improving the capital market ecosystem in GIFT City.
- The partnership of SGX and NSE increases the link between two rapidly expanding economies.
- NSE IX is prohibited from engaging into similar arrangements with other exchanges, ensuring the partnership’s stability.
- The original five-year contract is renewable for another two years.
Time spent in operation
- GIFT NIFTY creates a trading link in which trading and matching take place in India while clearing and settlement take place in Singapore.
- It is open from 6:30 a.m. to 3:40 p.m. in Asia time.
- The second session, from 4:35 p.m. until 2:45 a.m. the following day, is aimed at investors from the United States and Europe.
SGX and NSE agreement
- Revenue distribution: The five-year agreement calls for Singapore Exchange (SGX) and NSE International Exchange (NSE IX) to split revenue 50:50.
- Initial income split: SGX will receive 75% of revenue generated in Singapore, while NSE would receive the remaining 25%.
- IFSC business: The NSE will keep 75% of the International Financial Service Centre (IFSC) business, while SGX would get the remaining 25%.
- Volume-based sharing in the future: Once a “threshold volume” is met, revenue will be distributed equally between the two organisations.
Switch to GIFT NIFTY
- Trading on the SGX NIFTY in Singapore ceased on June 30, with all trading volume and liquidity shifting to the GIFT IFSC.
- GIFT NIFTY has been renamed: The trading platform was renamed GIFT NIFTY, and it now offers four products: the GIFT Nifty 50, the GIFT Nifty Bank, the GIFT Nifty Financial Services, and the GIFT Nifty IT derivatives contracts.
Source: https://indianexpress.com/article/explained/explained-economics/what-is-gift-nifty-which-started-trading-from-july-3-8749073/#:~:text=GIFT%20NIFTY%20is%20the%20first,India%20and%20Singapore's%20capital%20markets.&text=Rechristened%20GIFT%20NIFTY%2C%20the%20popular,trades%20in%20a%20single%20session.