India's National Stock Exchange (NSE) and Singapore Exchange (SGX) got a set of approvals from statutory regulators for their proposal to launch products jointly at the Gujarat International Finance Tec-City (GIFT) in Gandhinagar. They received approval from SEBI (Securities and Exchange Board of India) and Monetary Authority of Singapore (MAS) after months of planning to allow SGX's Nifty futures contract (which is based on NSE's Nifty 50 Index) to be traded at GIFT.
"The proposed NSE International Financial Service Centre (IFSC)-SGX Connect aims to bring together the trading of Nifty products in Gujarat International Finance Tec-City (GIFT) and create a larger pool of liquidity comprising international and home market participants," NSE said in a regulatory filing on Tuesday.
The new arrangement will allow investors using the SGX platform to gain access to Indian securities through NSE IFSC in Prime Minister Modi's home state.
The 'Connect' model is subject to further approvals from revelant local authorities including India's Ministry of Finance.
The two exchanges are working on making NSE IFSC-SGX Connect operational by the end of 2020. Initially they will be launching SGX Nifty futures at Gift City with other products soon to follow.
NSE's managing director and CEO Vikram Limaye said that the NSE is looking at discontinuing the ongoing arbitration proceedings against SGX once all the residual approvals are in place and SGX Nifty ceases to trade in Singapore.
The two exchanges were engaged in arbitration proceedings after exchanges in India, in February 2018, announced to end licensing their indexes to foreign bourses from August that year over concerns that it would lead to offshore migration of Indian derivatives trades.