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Proposed NSE IFSC-SGX Connect receives regulatory dispensations

Date: 06-Aug-2019
Source: Various Publications

Reuters (Times of India, Zee Business, Yahoo Finance and NDTV)


NSE and Singapore Exchange win approval for joint derivatives project

Abhirup Roy| 6 August, 2019

MUMBAI (Reuters) - India’s National Stock Exchange (NSE) and the Singapore Exchange (SGX) have been given the go-ahead for a planned collaboration in trading stock index-based products from an international financial centre being developed in western India.

The two said on Tuesday they had won regulatory approval for their plan, which has been under discussion for months and which envisages bringing trading of the SGX’s Nifty futures contract, based on the NSE’s Nifty 50 index, to the new centre.

They hope this will create a larger pool of liquidity for the product, as well as boosting activity at the Gujarat International Finance Tec-City (GIFT), an initiative led by Indian Prime Minister Narendra Modi in his home state.

The collaboration remains subject to further approvals from relevant local authorities, the exchanges said, adding they were also working to resolve related arbitration proceedings.

The two exchanges have been locked in a dispute after India’s three main bourses unexpectedly announced in February last year that they would stop licensing their indexes to foreign bourses from August.

An Indian court last May referred the dispute to an arbitrator, asking SGX to continue listing and trading SGX Nifty contracts beyond August while barring it from offering proposed new products until a final decision.

NSE and SGX said they would work to have their proposed NSE International Financial Service Centre (IFSC)-SGX Connect project at GIFT operational before the end of 2020, subject to members’ readiness and receiving relevant approvals.

Vikram Limaye, managing director and chief executive of NSE, said he hoped all SGX Nifty futures volumes would ultimately move to GIFT IFSC.

“The objective is to make GIFT City the hub of all India access products,” Limaye said. “If we are able to successfully transition the SGX Nifty contract, I see no reason why all India access products can’t be transitioned to GIFT City.”

The Indian government has been trying to lure foreign investors to GIFT City, which offers close to zero tax, dollar contracts, and top-notch infrastructure.

Still, daily trading volumes have been a fraction of the tens of billions of dollars on the country’s two main stock exchanges.

SGX Nifty futures in Singapore have daily average volumes of $1.8 billion, dwarfing volumes on NSE’s international exchange at GIFT.

Over the past two decades, SGX has become the most popular market for foreign investors to bet on Indian equity indexes, with Nifty 50 futures tracking the NSE’s main index.

Reporting by Abhirup Roy; Writing by Swati Bhat and Promit Mukherjee; Editing by David Holmes.

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Reuters (Times of India, Zee Business, Yahoo Finance and NDTV)

Business Times (Singapore Based)


SGX, NSE aim to trade Nifty products via Gift City by end-2020
Regulators support proposed NSE International Financial Service Centre-SGX Connect

ANGELA TAN | WED, AUG 07, 2019 - 5:50 AM

SINGAPORE Exchange (SGX) and the National Stock Exchange of India (NSE) have received the nod from their respective regulators for a new trading model which will see India's Nifty futures contracts on SGX executed in International Financial Services Centre (IFSC), Gift City, Gujarat, instead.

The proposed NSE International Financial Service Centre (IFSC)-SGX Connect aims to bring together the trading of Nifty products in Gujarat International Finance Tec-City (Gift) and create a larger pool of liquidity comprising international and home market participants, the two exchanges said.

The latest proposal, announced on Tuesday, puts to rest the 18-month long tussle between India's NSE and SGX over the trading of the popular Indian derivative products on SGX.

Under the new arrangement, which is subject to further approvals from relevant Indian authorities, all Nifty trade orders from Singapore will be routed to a special purpose vehicle (SPV) to be set up by SGX in Gift City - India's version of a tax exempt off-shore destination - for execution. Clearing will still be done by SGX.

The arrangement is the first of its kind and requires several regulatory exemptions, especially since the new model will see the additional interface in the form of SGX's SPV between a client and an exchange, in this case, NSE IFSC.

SGX and NSE aim to work with all key stakeholders to make the NSE IFSC-SGX Connect operational before the end of 2020, subject to members' readiness and receiving all relevant approvals. Both exchanges are also working to discontinue related arbitration proceedings. Meanwhile, all Nifty futures will continue to trade as per normal on SGX.

SGX's chief executive officer, Loh Boon Chye, said India is an important market for international investors and SGX is committed to collaborating with NSE and other stakeholders to build connectivity and access to one of the fastest growing economies in the world.

"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. Our comprehensive portfolio investment and risk management solutions across equities, fixed income, currencies and commodities cover close to 100 per cent of Asia's gross domestic product."

For Vikram Limaye, managing director and chief executive officer of NSE, the partnership with SGX is "a great opportunity to build vibrant markets in Gift City" which can serve the needs of home and international stakeholders.

"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,'' he said.

The SGX Nifty saga unfolded when the Indian national exchange said last February that it would withdraw from an 18-year licensing agreement with SGX and stop offering live prices to overseas venues, jeopardising SGX's Nifty 50 futures contract business.

With NSE trying to assert its right over one of its flagship products, the Nifty 50 index futures, and draw trading back to India, SGX planned to launch an alternative set of products that would provide a similar form of hedging for global investors with exposure to the US$2.3 trillion Indian equity market.

On April 11, 2018, the SGX announced it would launch three new derivative contracts called SGX India Futures, SGX India Options and SGX Indian Bank Futures.

SGX's decision was met with an additional salvo from NSE in the form of an interim injunction filed by its subsidiary, the India Index Services and Products Ltd (IISL).

The Business Times understands that initially, SGX and NSE had proposed to establish an inter- exchange connectivity in line with Shanghai-Hong Kong stock connects.

However, both the market regulators - the Securities and Exchange Board of India (Sebi) and Monetary Authority of Singapore (MAS) - have expressed reservations about the proposal, prompting the exchanges to come up with the latest proposal.

During the fiscal years 2017 and 2018, trading volume of the Nifty 50 futures on the SGX was 22.45 million contracts, accounting for about 11 per cent of derivative trading on the exchange.

In FY2019, SGX Nifty futures were the fourth most active contracts.

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Business Times (Singapore Based)

Channel News Asia (Singapore Based)


India's NSE and Singapore Exchange win approval for joint derivatives project

07 Aug 2019 08:36AM (Updated: 07 Aug 2019 08:40AM)

MUMBAI: India's National Stock Exchange (NSE) and the Singapore Exchange (SGX) have been given the go-ahead for a planned collaboration in trading stock index-based products from an international financial centre being developed in western India.

The two said on Tuesday they had won regulatory approval for their plan, which has been under discussion for months and which envisages bringing trading of the SGX's Nifty futures contract, based on the NSE's Nifty 50 index, to the new centre.

They hope this will create a larger pool of liquidity for the product, as well as boosting activity at the Gujarat International Finance Tec-City (GIFT), an initiative led by Indian Prime Minister Narendra Modi in his home state.

The collaboration remains subject to further approvals from relevant local authorities, the exchanges said, adding they were also working to resolve related arbitration proceedings.

The two exchanges have been locked in a dispute after India's three main bourses unexpectedly announced in February last year that they would stop licensing their indexes to foreign bourses from August.

An Indian court last May referred the dispute to an arbitrator, asking SGX to continue listing and trading SGX Nifty contracts beyond August while barring it from offering proposed new products until a final decision.

NSE and SGX said they would work to have their proposed NSE International Financial Service Centre (IFSC)-SGX Connect project at GIFT operational before the end of 2020, subject to members' readiness and receiving relevant approvals.

Vikram Limaye, managing director and chief executive of NSE, said he hoped all SGX Nifty futures volumes would ultimately move to GIFT IFSC.

"The objective is to make GIFT City the hub of all India access products," Limaye said. "If we are able to successfully transition the SGX Nifty contract, I see no reason why all India access products can’t be transitioned to GIFT City."

The Indian government has been trying to lure foreign investors to GIFT City, which offers close to zero tax, dollar contracts, and top-notch infrastructure.

Still, daily trading volumes have been a fraction of the tens of billions of dollars on the country's two main stock exchanges.

SGX Nifty futures in Singapore have daily average volumes of $1.8 billion, dwarfing volumes on NSE's international exchange at GIFT.

Over the past two decades, SGX has become the most popular market for foreign investors to bet on Indian equity indexes, with Nifty 50 futures tracking the NSE's main index.

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Channel News Asia (Singapore Based)

Singapore Business Review (Singapore Based)


SGX and India's NSE receive greenlight to set up joint financial center

The NSE IFSC-SGX Connect aims to launch before end-2020.

The Singapore Exchange (SGX) and India’s National Stock Exchange (NSE) have received regulatory support to set up a joint international financial centre in Western India, the two exchanges companies said in a joint statement.

The NSE International Financial Service Center (IFSC)-SGX Connect will enable SGX and NSE IFSC members to access Nifty products in the Gujarat International Finance Tec-City (GIFT), according to the release.

GIFT City will reportedly offer close to zero tax and dollar contracts. The Indian government was also reportedly trying to attract foreign investors to GIFT City.

In a statement, NSE managing director and chief executive officer Vikram Limaye expressed confidence that the NSE IFSC-SGX Connect will launch within 12 months after receiving all approvals, with a launch date eyed before the end of 2020.

"The objective is to make GIFT City the hub of all India access products. If we are able to successfully transition the SGX Nifty contract, I see no reason why all India access products can't be transitioned to GIFT City,” Liyame said.

The project remains subject to further approval from local authorities, whilst the exchanges said that they are still working to resolve arbitration proceedings

Last February, India’s three main bourses announced that they will stop licensing their indices for foreign bourses in August. The arbitrator of the dispute imposed on SGX to continue listing and trading SGX Nifty contracts beyond August, but barred it from offering new products until a final decision was reached.

Currently, the SGX Nifty Futures volume averages around $2.49b (US$1.8b) daily whilst the IFSC totals $207.12m (US$150m).

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Singapore Business Review (Singapore Based)

ET Markets


Proposed NSE IFSC–SGX Connect gets regulatory nod
The Connect model will enable SGX and NSE IFSC members to access Nifty products in GIFT.

Ami Shah | Updated: Aug 06, 2019, 05.54 PM IST

Mumbai: The National Stock Exchange (NSE) and Singapore Exchange (SGX) have received a set of approved regulatory dispensations from their statutory regulators, obtaining their support to a joint proposal that the two exchanges had submitted earlier this year.

The proposed NSE International Financial Service Centre (IFSC)-SGX Connect aims to bring together the trading of

Nifty products to Gujarat International Finance Tech-City (GIFT) and create a larger pool of liquidity, comprising international and home market participants, NSE said in a release.

“We were working on this SGX matter over the last 18 months,” said Vikram Limaye, Managing Director and CEO of NSE.

“There is a significant amount of liquidity in Nifty contracts in Singapore. This will ensure that we have a single pool of liquidity of the Nifty contract in GIFT city as opposed to having fragmented liquidity without contract in Gift city and SGX contract in Singapore etc,”Limaye said, adding he hopes the new setup is operational within the next 12 months.

The SGX Nifty contracts in Singapore would cease once the contracts are live in GIFT city.

At present, SGX Nifty volumes are $1.8 billion on an average, while those in IFSC are $150 million, Limaye pointed.

The Connect model, which is subject to further approvals from relevant local authorities, will enable SGX and NSE IFSC members to access Nifty products in GIFT, while managing their exposures through their respective clearing corporations.

SGX and NSE will continue to work with all key stakeholders to make the NSE IFSC-SGX Connect operational before the end of 2020, subject to members’ readiness and receiving all relevant approvals.

Both exchanges are also working to discontinue related arbitration proceedings, NSE said in a release.

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ET Markets

PTI


With regulatory approvals in, NSE, SGX hopes to launch new platform at IFSC by end-2020

Wednesday, 07 August 2019 | PTI

The NSE and Singapore Exchange (SGX) have received all regulatory approvals to launch SGX Connect, a new joint platform that is likely to be functional from the NSE International Exchange at Gift City in Ahmadabad towards the end of 2020.

The announcement Tuesday formally ends the long bickering and an arbitration case at the Bombay High Court between the two large exchanges in Asia that traces the problem to a February 2018 statement by NSE that it would end the joint platform--SGX-Nifty-that used to trade NSE’s offshore equity derivatives, from October 2018. Subsequent talks between the two did not yield any results. Soon, the BSE had also decided to stop supplying its derivatives to its foreign partners as part of an attempt to prevent more of the domestic equity derivatives market from going offshore.

In fact, the domestic exchanges were prodded by SEBI and the RBI as huge offshore volumes were leading to very high volatility in the onshore rupee and futures markets.

The move prompted SGX to seek legal remedies against NSE and in April 2018 SGX also decided to launch Indian single-stock options despite NSE’s objections which further created a rift between the two and in May 2018 both the parties moved Bombay HC seeking an arbitration award. The next month, the HC asked NSE to allow its derivatives to be allowed to be traded on the SGX in the interim. In March 2019, the Bombay HC extended NSE-SGX arbitration deadline to December 31, 2020 as both the parties sought more time to settle the dispute.

It can be noted that Nifty futures contracts on the SGX were very popular among foreign portfolio investors looking to trade in dollar-denominated products and not wanting to register with SEBI. And at its peak in 2016, SGX Nifty volumes were 1.4 times higher than those on the onshore NSE platform.

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Money Control


NSE IFSC-SGX Connect gets regulatory nods, aims to launch by end 2020
The NSE and SGX said they have received all approvals from their respective regulators to launch NSE IFSC-SGX Connect

Aug 06, 2019 09:01 PM IST

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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Money Control

Bloomberg Quint


NSE, SGX Get Regulatory Approval To Trade Through Gujarat Finance Hub

BQ Desk |Aug 06 2019, 5:44 PM

The National Stock Exchange and its Singapore counterpart received regulatory approvals for a trading link through the international finance hub in Gujarat to help overseas investors hedge risks in one of Asia’s largest market.

India’s largest bourse and Singapore Exchange, earlier this year, had submitted a joint proposal to their respective regulators on an NSE-International Financial Services Centre-SGX Connect model that aims to bring together trading of Nifty products in the Gujarat International Finance Tec-City. This proposal has now received the regulatory dispensation, according to a media statement.

The connect model, subject to relevant local authorities’ approval, will enable SGX and NSE IFSC members to access Nifty products in GIFT City while managing their exposure through their respective clearing corporations.

The regulators in the two countries had intervened in July last year, urging the squabbling partners to find a solution after Indian exchanges stopped sharing pricing data with overseas peers to prevent volumes from shifting overseas. That came after SGX announced its plan to offer single-stock Nifty 50 futures, which contribute more than 85 percent of the futures turnover at the NSE.

SGX and NSE will continue to work with all key stakeholders to make the NSE IFSC-SGX Connect operational before the end of 2020, subject to members’ readiness and receiving all relevant approvals. Both exchanges are also working to discontinue related arbitration proceedings.

NSE-SGX Joint Statement

“There is a significant amount of liquidity in Nifty contracts in Singapore. This is actually bringing back the markets that some would argue were exported over time,” Vikram Limaye, managing director and chief executive of NSE, said in the statement. “We wanted to make sure that we have a single liquidity pool in the dollar Nifty contracts as opposed to fragmented pools of our contracts in GIFT City.”

Limaye said they 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”.

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Bloomberg Quint

IANS (Outlook, the Quint) The Quint


Proposed NSE IFSC-SGX Connect receives regulatory approvals

06 August 2019 Last Updated at 11:10 PM | Source: IANS

Mumbai, Aug 6 the National Stock Exchange of India (NSE) and the Singapore Exchange (SGX) on Tuesday said their joint proposal for an International Financial Service Centre (IFSC) at Gujarat International Finance Tec-City (GIFT) has received regulatory dispensations.

The joint proposal by NSE and SGX has received "a set of approved regulatory dispensations from their statutory regulators", a statement said.

"The proposed NSE IFSC-SGX Connect aims to bring together the trading of Nifty products in GIFT and create a larger pool of liquidity comprising international and home market participants.

"The ''Connect'' model, which is subject to further approvals from relevant local authorities, will enable SGX and NSE IFSC members to access Nifty products in GIFT while managing their exposures through their respective clearing corporations," it added.

As per the statement, both SGX and NSE will continue to work with all key stakeholders to make the NSE IFSC-SGX Connect operational before the end of 2020, "subject to members'' readiness and receiving all relevant approvals. Both exchanges are also working to discontinue related arbitration proceedings".

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Updated on: 25/11/2019
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