GIFT Nifty begins trading today: Here's What You Should Know

Starting today, the
GIFT Nifty will replace the Singapore Stock Exchange’s SGX Nifty as the benchmark
by which Indian stock market opening cues are evaluated. All derivative
contracts worth $7.5 billion, which were formerly traded in Singapore, will now
be traded in GIFT City, India.

Read also this: Finance Ministry reports a 12% increase in GST receipts to over Rs 1.61 trillion for the month of June.

A formal agreement
between the NSE International Financial Services Centre, a wholly-owned
subsidiary of NSE, and the Singapore Stock Exchange will govern the rebranding
initiative.

Beginning today, there
will be two trading sessions for the GIFT Nifty. The first one will commence at
6:30 AM Indian Standard Time (IST) and last until 3:40 PM IST. The second
session will begin at 17:00 IST and conclude at 12:45 IST.

Today, contracts for
GIFT Nifty 50, GIFT Nifty Bank, GIFT Nifty Financial Services, and GIFT IT will
become available for trading.

In the first step, the
Singapore Exchange (SGX) Nifty will replace the GIFT Nifty for all Singaporean
trades.

The settlement, or the
process of matching trades, will also take place at the NSE International Financial
Services Centre in GIFT City, Gandhinagar, Gujarat, through a Special Purpose
Vehicle (SPV) known as SGX India Connect IFSC.

Trading orders for
Nifty 50 futures placed by SGX members will be sent to the NSE IFSC for
matching. Both the NSE IFSC clearing company (NICCL) and SGX-DC (the central
counterparty for SGX clearing members) will clear the trades once they have
been executed.

Singapore will send
representatives through its SPV, and New York Stock Exchange will send
representatives through GIFT City. For each new member brought by NSE or SGX,
the exchange will receive 75% of the revenue and the other exchange will
receive 25%. Proprietary traders and client traders will have distinct tariff
rates. The former will net the exchange $0.40 for every deal, while client
traders would bring in $1.

Present Traders in
India’s retail sector cannot access Nifty through the LRS. The LRS
prohibits leveraged traders, such as those involved in futures and options,
from taking advantage of the $2,50,000 annual limits set by the Reserve
Bank of India (RBI).

However, Indian brokers
and subsidiaries may bring in capital from wealthy Indians who are neither
Indian citizens nor permanent residents. They can trade both for
themselves and on their client’s behalf.

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