Financial Odyssey: Nifty Index’s Trading Route from Singapore To GIFT City

After 22 years of servicing international investors and representing offshore interest in the Indian equity index, Singapore Stock Exchange (NIFTY) returns home. It moved to the Gujarat International Finance Tec-City in its new avatar, popularly known as GIFT Nifty. Under this arrangement, the trades will be routed to National Stock Exchange International Exchange (NSE IX) GIFT City for trading and execution. As per the report, PM Narendra Modi will launch SGX Nifty trade at GIFT City. This blog will analyse this grand shift in the financial service centre and how investors can benefit from it.

Tracing Nifty’s Journey From Singapore To GIFT City

The news of shifting SGX (NIFTY) to GIFT City marks the remarkable journey of shifting the $7.5 billion derivatives trade from Singapore to Gujarat. As per the sources, SGX future contracts will be rebranded as GIFT (NIFTY). Let’s take a look at the journey of SGX NIFTY from Singapore to Gujarat. 

It represents the Indian equity index and derivatives offshore and creates a good image of the National Stock Exchange abroad. Under this arrangement, SGX NIFTY was suspended from trading and eventually delisted from Singapore Stock Exchange. From now, all the trades are routed to the NSE International Stock Exchange GIFT City, as per the report of Economic Times.

Why Is Singapore’s NIFTY Shifting To The GIFT City?

You might wonder why Nifty’s trading route is shifting from Singapore to Gujarat’s GIFT City. As per the information shared by officials, all the open positions in SGX have been shifted to GIFT City. This shift from SGX NIFTY will settle the 5-year-old feud between NSE and Singapore Stock Exchange over the latter’s plan to introduce single stock futures trading. 

Various experts also see it as an effort from the government to allow NRIs to invest in India through GIFT. Currently, NRIs can invest in stocks and bonds via a specific process. Investing in NSE unlisted shares and other companies’ shares for NRIs involves a complex account opening process. It involves attestation of documents from the embassy, opening PIS accounts, and more. This step is also seen as a step to bring foreign investment to the National Stock Exchange via GIFT City.

How Does It Impact Retail Investors And Traders?

For retail investors and traders, it will bring a positive impact, and the rules and regulations are not much changed. It is just a migration from one stock exchange to another, providing investors and traders opportunities to invest in indexes, bonds, and equities without paying an international investment fee. The Central government is working towards making GIFT CITY more accessible to investors through its various initiatives.

Another benefit for investors with this shift is that they will get exemptions from STT, dividend distribution tax, commodity transaction tax, capital gain tax waivers, etc. According to NSE IX CEO V Balasubramaniam, “It becomes much more advantageous for non-resident players. And all the entities from India, which set up a subsidiary there, are also treated as non-residents and exempted from tax.” Investors will get multiple advantages from the shifting of NIFTY from Singapore to GIFT City.

Why GIFT City: The Rationale Behind The Shift

One of the significant questions every investor or trader is asking today is why GIFT City is shifting trading from the Singapore stock exchange. The reason behind it is the story of GIFT, the hub for international finance centres in India. It has been under the central government’s primary focus over the years and has been promoted for receiving global investment. Due to this, GIFT became a centre for NRI and received an investment with a banking asset book of more than $35 billion. The GIFT City is chosen to deepen India’s integration with the global finance sector.

The Expected Impact Of This Shift On GIFT City And Investors

If we talk about the possible impact of shifting SGX (NIFTY) to GIFT (NIFTY), it will bring various opportunities to investors. From GIFT City’s perspective, it will bring more exposure and strengthen its position in the international finance market. However, it is an excellent opportunity for investors to trade NIFTY without paying different taxes.

In addition, the National Stock Exchange will also have marginal effects from this shift which will benefit investors who buy unlisted shares. The NSE IX will not trade in GIFT City; it is expected that NSE will receive international investment positively affecting its pre-IPO stocks. So if you plan to invest in NSE pre-IPO stocks, it is a great time to do so now. With the help of Stockify, you can easily buy unlisted shares of NSE by analysing its financial performance. 

Here, you will get assistance from the best unlisted share brokers in India, who will guide you throughout the trading process. To make the most out of your investment, contact us now.

FAQs

Q1- What is GIFT City?

GIFT City is a new identity given to the SGX NIFTY to all open positions that have been shifted to SGX IX.

Q2- What will happen to SGX NIFTY now?

During the shift, SGX NIFTY will not available for trading and eventually delisted from the Singapore Stock Exchange.

Q3- Can retail investors and traders trade in GIFT NIFTY Contracts?

Leverage trades are not allowed for retail investors and traders yet under the Liberalised Remittance Scheme (LRS) route.

Q4- What will be the timings of SGX NIFTY in GIFT NIFTY?

GIFT NIFTY will be accessible for almost 21 hours. It will open in two sessions, during which you can trade it.

Q5- What other contracts will be available under GIFT NIFTY?

Under the GIFT NIFTY, other contracts will be like GIFT NIFT bank, GIFT financial services, etc.

Table of Contents

All the trades of SGX NIFTY will be routed to GIFT City, ending the 5-year-old feud between the Singapore stock exchange and NSE.

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