Nifty trade matching in a single liquidity pool aims to build larger unified market
International investors will continue to trade through Singapore Exchange (SGX Group) in Nifty as the US$7 billion open interest contract is relaunched on GIFT City from 3 July 2023, following on to the 22 years of success in Singapore.
This collaboration is significant given it is the first cross-border initiative in connecting India and Singapore’s capital markets.
“SGX Group will continue to provide international access to USD-denominated Nifty contracts, which has been re-christened GIFT Nifty starting 3 July 2023, alongside other SGX derivatives products,” Press Trust of India (PTI) quoted Janice Kan, Managing Director, Head of Markets Equities at SGX Group on 30 June.
“Investors can trade and clear the Nifty contracts through SGX as they have been doing for more than two decades. Orders will be routed via the Connect to NSE IX for trade matching and executed trades will be cleared and settled on SGX,” said Kan, an equity market veteran of over three decades.
Kan has seen through the development of the Nifty derivatives, as investors’ interest in the Indian equity markets grew over time. Operating in an AAA-rated global financial centre as well as a neutral trading and clearing venue, SGX is well placed to help internationalise the Nifty brand when the index was incepted by NSE in 1996. NSE and SGX inked a partnership and the USD denominated Nifty futures were launched on SGX in September 2000.
Today, it accounts for 52 per cent of the offshore open interest in India equity indices, ahead of all other Indian equity indexes.
“This speaks volume of the demand and interest in the Nifty contracts and the international branding that SGX has built for the domestic India benchmark,” Kan said to PTI.
Kan says the transition of the Nifty trade matching to a single liquidity pool in Ahmedabad aims to build a larger unified market, creating a deeper liquidity pool with participation from both India and global investors.
“We are enlarging the ecosystem through the GIFT Connect,” she underlined. “The market has the potential to increase manifolds.”
The GIFT Connect is fully supported by the government and regulatory authorities in India and Singapore.
It has taken four years from conceptualisation to achieving full scale operations on 3 July 2023, says Kan. Fiinews.com
