GIFT NIFTY commences ops; USD 1.3-billion trade volume in first session

“Our contract with SGX is for five years, which can be extended further for two years. The profit sharing is largely on a 50:50 basis. For the business generated by Singapore, SGX will get 75 per cent of the profit, while for any businesses generated by IFSC, we will get 75 per cent of the profit. There is a threshold volume beyond which the profit sharing becomes 50:50,” said V Balasubramaniam, MD and CEO of NSE International Exchange.

GIFT Nifty 50 constituted 99 per cent of the trade volumes on Monday, he told The Indian Express later. A small portion of the trades belonged to GIFT Nifty Bank. Two other products — GIFT Nifty Financial Services and GIFT Nifty IT derivative contracts — are also being offered under the GIFT Nifty brand. “Our product has come back to us after 23 years. In the longer run, we expect international investors to come directly to GIFT City,” he said, adding that 90 per cent of the trading volumes currently come via SGX.

When asked about the five-year deal with SGX, Balasubramaniam said, “As per this five-year deal, Singapore wanted an exclusivity that we will not do any such arrangement with any other exchange in the world. After five years, we can renegotiate.”

SGX CEO Loh Boon Chye, who joined the event virtually, said, “For over two decades, SGX has been working with NSE to internationalise the NIFTY benchmark. Hence, we are excited to see the continued strong demand and interest of global investors as we opened the market this morning with USD 8 billion of open interest in GIFT Nifty.”

It is a bold step to serve SGX’s international customers with unparalleled access to Asia, Chye said. “This is the first-of-its-kind trading link — with trading and matching in India and clearing and settlement in Singapore. It is likely the first cross-border capital markets collaboration between Singapore and India,” added.