SGX Nifty, used by offshore investors who trade in US dollars, will be suspended for trading after market hours on Friday and eventually get delisted. The index will get reborn in a new avatar from Monday, July 3 as all SGX Nifty positions will be converted to Gift Nifty positions over the weekend.
A 100% subsidiary of NSE, NSE IX offers a single pool of liquidity and a venue to access USD-denominated Nifty derivatives under the regulatory framework of the International Financial Services Center Authority (IFSCA). Other than Gift Nifty50, it will also have Gift Nifty Bank, Gift Nifty Financial Services, and Gift Nifty IT derivative contracts with plans to gradually roll out other indices under the Gift Nifty suite.
The entire Open Interest (OI) in SGX Nifty of around $7 billion will shift to Gift Nifty. The daily volumes are around $1.5-2 billion.
Gift Nifty will be accessible for almost 21 hours, which overlaps Asia, Europe, and US trading hours. It would be open in two sessions – from 6.30 am to 3.40 pm in the morning and then again from 4.35 pm to 2.45 am in the second session.
Based out of GIFT City SEZ, investors will get exemptions from STT, commodity transaction tax, dividend distribution tax, and capital gain tax waivers.
“It becomes much more advantageous for non-resident players. And all the entities from India, which set up a subsidiary there, are also treated as non-residents and they are also exempted from tax,” said NSE IX CEO V Balasubramaniam.From a trader and investor’s perspective, nothing will change as it would be just a migration from one stock exchange to another.
“Nothing changes from a trackability perspective. Instead of now looking at Singapore Exchange as the venue, now you will be looking at NSC International Exchange at GIFT City as the venue to track this product. The trading timings, the trading hours will remain the same,” he said.
As it opens well before the Indian stock market, SGX Nifty is widely treated as an indicator of market trajectory on any given day.
“Indian broking firms can establish full-fledged subsidiaries here. A lot of players from India will also be moving here. There are close to about 62 brokers who are fully ready to operate on our platform. And additionally, Singapore Exchange members will also be eligible to route orders here. So effectively, now we are looking at broadening the liquidity,” Balasubramaniam said.
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