In a significant move to enhance the domestic financial market and promote liquidity within India, plans have been set in motion for the transfer of trading from SGX Nifty to GIFT Nifty.
This strategic decision aims to consolidate the trading of the Nifty index within the borders of India, specifically at the Gujarat International Finance Tec-City (GIFT City). This article delves into the implications of this transfer and its potential impact on India’s financial landscape.
Enhancing Domestic Trading
The transfer from SGX Nifty to GIFT Nifty reflects a strong commitment to bolstering the domestic trading ecosystem in India. By shifting the trading of the Nifty index from the Singapore Exchange (SGX) to GIFT City, India aims to regain control over its key benchmark index and boost liquidity within the country.
This move aligns with the broader vision of establishing GIFT City as a prominent international financial center, capable of attracting global investors and fostering domestic participation.
Increased Regulatory Oversight: The transfer also reinforces regulatory oversight over the trading of Nifty futures and options.
With the shift to GIFT Nifty, Indian regulatory bodies gain greater control and surveillance capabilities over the trading activity. This enhanced oversight is expected to promote fair and transparent trading practices while safeguarding the interests of market participants.
SGX Nifty Transferred to GIFT City from which Date ?
India’s financial landscape is set to witness a significant transformation as the transfer of SGX Nifty to GIFT City comes into effect on July 3, 2023. This transfer marks a milestone in India’s journey towards regaining control over the trading of its benchmark Nifty index.
All SGX Nifty trades will be stop from from 30, June 2023 and after 30 June all trades from 3 July will be place on GIFT City. Indian tarders will not take trade in that but foreign traders will get more accurate data.
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Strengthening Market Liquidity
One of the primary objectives behind the transfer is to strengthen liquidity in the Indian market.
By concentrating trading activity onshore, the transfer aims to channelize trading volumes and liquidity within India, leading to increased market depth.
This development is expected to attract more investors, both domestic and international, who seek to benefit from improved liquidity and efficient price discovery.
Boosting GIFT City’s Profile
GIFT City, located in Gandhinagar, Gujarat, has been envisioned as India’s answer to global financial centers like Singapore and Dubai. The transfer of SGX Nifty to GIFT Nifty is a significant step towards fulfilling that vision.
By hosting the trading of the Nifty index, GIFT City stands to gain prominence as a financial hub and attract greater participation from financial institutions, banks, and market intermediaries. This move also enhances the prospects of GIFT City becoming a gateway for foreign investors looking to access Indian capital markets.
SGX Nifty Mitigating Overseas Dependency
Historically, a substantial portion of Nifty trading has taken place on foreign exchanges, primarily the SGX. This reliance on overseas platforms posed challenges related to price fragmentation, limited regulatory control, and reduced visibility for Indian regulators.
The transfer to GIFT Nifty aims to mitigate these concerns by centralizing trading activity within India, enabling greater regulatory supervision and strengthening the overall integrity of the market.
Conclusion
The transfer from SGX Nifty to GIFT Nifty marks a significant milestone in India’s journey towards developing a robust and self-reliant financial ecosystem. By concentrating the trading of the Nifty index within GIFT City,
India aims to enhance liquidity, promote domestic trading, and boost the profile of its international financial center. This strategic move aligns with the larger objective of attracting global investors, strengthening market integrity, and establishing India as a prominent player in the global financial landscape.