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NSE and SGX Signs Pact to Confirm Key Terms to Operationalise NSE IFSC-SGX Connect

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NSE, SGX sign pact on Connect model to deepen liquidityOn September 22, 2020 Singapore Exchange Ltd (in short- SGX) and National Stock Exchange of India Ltd. (inshort- NSE) signed a formal agreement in order to confirm the key terms to operationalise the NSE International Financial Service Centre (IFSC)-SGX Connect. NSE IFSC-SGX Connect unites international and Gujarat International Finance Tec-City (GIFT) participants to create a large liquidity pool for Nifty products in GIFT City.

  • The arbitration proceedings will be withdrawn by NSE and SGX, which started after a dispute that erupted in 2018, regarding the trading of Indian stock-based derivatives in Singapore.

Key Info

The collaboration is a vital step to fulfill the vision of Atmanirbhar Bharat as envisaged by the Prime Minister of India with GIFTI FSC playing a much larger role in the global financial markets.

Regulatory Approval

i.Regarding the implementation of the Connect, NSE and SGX have received further regulatory explanations from relevant authorities recently.

Note– The exchanges did not detail about the clarifications sought by Securities and Exchange Board of India (Sebi) and Monetary Authority of Singapore (MAS).

ii.In 2019, both the exchanges received consent from their respective statutory regulators on the proposed Connect model.

Both Parties will Work with Key Stakeholders

In order to  develop the infrastructure for the Connect and ensure member readiness prior to its implementation, both parties will continue to work with key stakeholders.

About Connect

The connect will expand the base of international and domestic participants and further  reinforce the capital market ecosystem in GIFT city, resulting in broader growth across asset classes and capital raising activity.

General Info

i.NSE and SGX will establish the Special Purpose Vehicle (SPV). This Special Purpose Vehicle (SPV) will ease trading of its clients .

ii.SGX will act as the clearing member, so most of the revenue from trades at NSE-IFSC will go to SGX.

Additional Info

SGX will work together with NSE and stakeholders to build a connectivity infrastructure which incorporates international best practices and creates new value for existing and new customers.

Recent Related News:

BSE, formerly known as Bombay Stock Exchange has signed a Memorandum of Understanding(MoU) with Akola Sarafa Association and Akola Sarafa Va Suvarnakar Yuva Sangh , Maharashtra based bullion trade and industry associations for deepening the commodity derivatives market in India and benefit the trading and hedging of all the market participants in Indian bullion derivatives market.

About National Stock Exchange of India Ltd.(NSE):

HeadQuarters– Mumbai, Maharashtra
Managing Director(MD) and Chief Executive Officer(CEO)– Vikram Limaye

About Singapore Exchange Limited(SGX):

HeadQuarters– Singapore
CEO– Loh Boon Chye