The National Stock Exchange International Financial Service Centre (NSE IFSC) and Singapore Exchange (SGX) on Tuesday said they have received all approvals from their respective regulators, Securities and Exchange Board of India (SEBI) and the Monetary Authority of Singapore (MAS), for the proposed NSE International Financial Service Centre (IFSC)-SGX Connect.
The proposed NSE International Financial Service Centre (IFSC)-SGX Connect aims to bring together the trading of Nifty products in the Gujarat International Finance Tec-City (GIFT) and create a larger pool of liquidity comprising international and home market participants.
"This is a great opportunity to build vibrant markets in GIFT City. We are working on varied product offerings to make GIFT City the hub of activity for all India access products across asset classes for international investors and a gateway for home investors to access international markets," NSE managing director and chief executive officer Vikram Limaye said.
He added that NSE and SGX will continue to work with all stakeholders to make NSE IFSC-SGX Connect and is confident of launching the exchange within 12 months after receiving all approvals. The companies aim to launch it before end of 2020.
The Connect model, which is subject to further approvals from relevant authorities including finance ministry.
However, the Finance Ministry has expressed its concerns regarding know-your-customer (KYC) norms, and wants to ensure that end beneficiaries are known in accordance with rules laid down by the Prevention of Money Laundering Act.
The move to set up an international exchange got an impetus after the top Indian exchanges came together and said they would stop sharing data with international exchanges such as SGX after a particular timeframe.
NSE and SGX announced their partnership soon after.
"This will attract not only the participants today that are in Singapore but also broaden the market. There will be new products," Limaye said.
“As Asia’s most international and connected multi-asset exchange, we are committed to providing our global institutional clients with open, single-point access to Asia,” SGX CEO Loh Boon Chye said.
"Our comprehensive portfolio investment and risk management solutions across equities, fixed income, currencies and commodities, cover close to 100% of Asia’s GDP. India is an important market for international investors and we are committed to collaborating with NSE and other stakeholders to build connectivity and access to one of the fastest-growing economies in the world," he added.
Currently, the SGX Nifty Futures volume is about $1.8 billion average daily basis and IFSC is $150 million.
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