After SGX, NSE plans to tie-up with more international bourses at GIFT City

The National Stock Exchange (NSE) is in talks with more international bourses for a tie-up at the GIFT City, the country’s first and only international financial services centre (IFSC). While it is known that the NSE and Singapore Exchange (SGX) are in the process of finalising the so-called ‘connect’ programme, NSE’s chief has revealed that the tie-up may not just be restricted to the Singapore bourse.

“NSE is putting together connect structures with SGX and a few other international exchanges to consolidate the liquidity of India access products at our GIFT City exchange,” Vikram Limaye, managing director and chief executive officer, NSE said on Wednesday. 

NSE refused to disclose names of other exchanges it has initiated talks with. People in the know say it is likely that the exchange could rope in all the exchanges where Indian derivative products were popular before the Indian bourses decided to snap data sharing and licensing pacts. In February 2018, Indian exchanges announced the move in order to stop trading in domestic products on overseas platforms.

SGX is a popular destination for Nifty products. However, there are several global platforms where Nifty as well as Sensex products were being traded. Some of these exchanges include the Dubai Gold and Commodity Exchange, Chicago Mercantile Exchange, and London Stock Exchange.

“The connect programme will go live with SGX first. If it is successful, there could be similar tie-ups with more exchanges,” said an exchange official.

Industry players said every exchange has its unique trading pool and clientele. Therefore, such tie-ups will help broaden participation at GIFT City, where dollar-denominated Indian derivatives are traded. In August, NSE and SGX had said they had received regulatory approvals from their respective securities regulator for creation of trading link. 

However, more approvals and regulatory issues need ironing out before the connect programme goes live. NSE and SGX are hoping the NSE 

IFSC-SGX Connect will be operational before the end of next year. Connect progammes allow cross-border tie-ups between exchanges. Singapore and Malaysia; Hong Kong and Mainland China are some of the places where the connect programme has been successfully implemented.