WHAT?

GIFT Nifty is a USD-denominated derivative contract based on the Nifty 50 index, traded on the NSE International Exchange (NSE IX) at GIFT City, Gujarat. It represents India’s strategic move to bring offshore Nifty trading back under Indian regulatory jurisdiction, replacing the earlier SGX Nifty (Singapore Exchange).

GIFT Nifty, the stock index of GIFT City, offers a similar tax environment to SGX Nifty (Singapore Exchange), ensuring tax neutrality for international players. Additionally, non-resident players can benefit from tax advantages in GIFT City, such as exemptions from capital gains tax, securities transaction tax and stamp duty.

Earlier, SGX Nifty was a licensed agreement between Singapore Exchange and NSE, which allowed NSE to offer trading in Nifty futures and options in Singapore. GIFT Nifty will replace SGX Nifty as the early indicator for the Indian market, setting the price market and tone for the Indian market.

GIFT NIFTY is the rebranded version of SGX Nifty as all open positions (open for trade) in SGX as they have been shifted to NSE International Exchange ISFC Limited (NSE IX) in GIFT City, Gujarat which came into effect from July 3rd.

WHERE?

GIFT City is the new financial hub in Gujarat, which the government intends to develop as a competitor of other global financial centres like Dubai, Mauritius, and Singapore.

It is a path-breaking move in the field of global trading in India and under this all the derivative contracts worth $7.5 billion, earlier traded in Singapore will shift to India.

The umbrella brand GIFT Nifty will include a total of four products, which are GIFT Nifty 50, GIFT Nifty Bank, GIFT Nifty Financial Services, and GIFT Nifty IT derivative contracts.

WHY GIFT NIFTY MATTERS?

OWNERSHIP

SGX and Nifty will have a 50-50 partnership in GIFT Nifty. SGX will handle clearing, while the trading of futures and options will take place in GIFT City.

TIMINGS

Trading in the GIFT NIFTY is available for 22 hours a day, from 4 AM to 2 AM (next day). Previously, SGX Nifty used to operate for 16 hours, from 6:30 am IST to 10:30 pm IST. However, this arrangement’s operation time has been extended from 4:00 AM IST to 2:00 AM IST the following morning.

The NSE SGX connect will help Indian markets to increase their reach among global investors, especially those who are not directly engaged with Indian capital markets.

As for the mechanism, the traders and investors will continue to place orders, as they have been doing, with the servers that match the orders shifted to GIFT City. The trading experience remains largely unchanged.The CEO of NSE International Exchange described this move as a ‘watershed movement’ for India, as it introduces an international contract previously traded outside the country.
 

Regulation and Settlement

• Regulated by International Financial Services Centres Authority (IFSCA)
• Clearing and settlement handled by NSE IFSC Clearing Corporation
• Complies with global trading norms