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).