“Full-scale operation of the NSE IFSC-SGX Connect with the transition of SGX Nifty derivatives to NSE IFSC will take place on 3 July 2023. Following the transition, all US dollar-denominated Nifty derivatives contracts will be exclusively traded on NSE IFSC, said a circular from the Singapore Exchange.
In July, 2022 Prime Minister Narendra Modi launched the NSE IFSC-SGX Connect, a joint venture between the National Stock Exchange of India (NSE) and the Singapore Exchange (SGX), which would trade and clear Nifty equity derivatives for global institutions.
The SGX said that in executing the liquidity switch, the exchange would automatically migrate all open positions in SGX Nifty on June 30, 2023, to NSE IFSC Nifty.
Nifty contracts on SGX are popular among foreign investors who do not wish to trade in India. At its peak, trading in Nifty contributed as much as 10% to the Singapore stock’s revenue. In early 2018, India’s stock exchanges decided to stop licensing their indexes to foreign exchanges from August 2019 amid concerns over the flight of trading activity by foreigners to Singapore.
SGX dragged NSE into a legal dispute after the termination of the agreement. The issue finally went to arbitration. Both exchanges withdrew the arbitration in September 2020 after they decided to enter a connectivity package at Gift City.
SGX has told the market participants, who do not wish to have their SGX Nifty migrated to NSE IFSC Nifty to close out the open positions in SGX Nifty or perform the switch themselves via open market trading before the end of the session on 30 June 2023.
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