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All About GIFT Nifty

Table of Contents

• Introduction
• What is GIFT Nifty?
• What will happen to SGX Nifty?
• What are the timings of GIFT Nifty and SGX Nifty?
• Is there any difference between SGX Nifty and GIFT Nifty?
• Where will GIFT Nifty data be available?
• Why is SGX Nifty being shifted to GIFT Nifty?
• How will GIFT Nifty be traded?
• What is GIFT Connect?
• How was GIFT Connect formed?
• Conclusion

GIFT Nifty Introduction

For many years, the SGX Nifty has been an indicator of the movement of the domestic indices. But now the SGX Nifty is shifted to the new international exchange NSE IFSC in GIFT City, Gujarat and has been renamed ‘GIFT NIFTY’. 

Let us uncover what GIFT Nifty is and the reason behind the transfer. We will look into both contracts’ trading hours and where and how GIFT Nifty will be traded. The article will also discuss the quarrel between NSE and SGX and how it led to the formation of GIFT Connect.

What is GIFT Nifty?

For many years, the Nifty Futures contracts traded on the Singapore Exchange have been an indicator of the movement of the domestic indices, NSE Nifty 50 and S&P BSE Sensex. 

GIFT Nifty is the rechristened version of SGX Nifty, as all open positions in SGX have been shifted to NSE IX under the regulatory framework of the International Financial Services Center Authority (IFSCA).

What are the Timings of GIFT Nifty and SGX Nifty?

The new GIFT Nifty F&O contracts have 21-hour trading days between two sessions. The first session would be 9 hours long, from 6:30 am IST to 3:40 pm Indian Standard Time (IST). After a 55-minute break, a second 12-hour session will begin at 4:35 pm IST and continue till 2:45 am IST the next day.  

On the other hand, SGX Nifty was open for trade for 16 hours daily, between 6:30 am and 11:30 pm IST.

What will Happen to SGX Nifty?

All open SGX Nifty contracts ceased for trade on June 30. The entire volume of these contracts was shifted to the NSE IFSC. SGX Nifty would eventually be delisted from the SGX as well.

Is There Any Difference Between SGX Nifty and GIFT Nifty?

Although there are no fundamental differences between the two since GIFT Nifty is just a rebrand of SGX Nifty, there are a few variability. 

	GIFT Nifty	SGX Nifty
Exchange	NSE IFSX, GIFT City	SGX, Singapore
Trading hours	21 hours	16 hours
Timings	6:30 am to 3:40 pm IST and 4:35 pm to 2:45 am IST	6:30 am to 11:30 pm IST

Why is SGX Nifty Being Shifted to GIFT Nifty?

Transferring the derivative contracts to GIFT Nifty will help bring a bigger liquidity pool to the Indian markets. This will create a new path for international investors to participate in India’s growth story. 

The move would help attract foreign investors to India, especially GIFT City, instead of trading volume getting migrated out of the country. Investors will be attracted to GIFT City as it offers a top-notch infrastructure with nearly zero taxes, bringing capital inflows and boosting activity in GIFT City.

How will GIFT Nifty be Traded?

As per the arrangement, SGX has incorporated ‘SGX India Connect IFSC Private Limited’ GIFT city, which would act as a trading member of NSE IFSC and a clearing member of NSE IFSC Clearing Corporation Ltd (NICCL). 

For foreign investors, the contracts will first be routed by SGX’s trading members to NSE IFSC for trade matching. Then, they will be cleared on both NICCL and Singapore Exchange Derivatives Clearing (SGX-DC).

What is GIFT Connect?

GIFT Connect offers dollar-denominated GIFT Nifty and other Nifty contracts on NSE IFSC. Apart from GIFT Nifty, the derivatives contracts for GIFT Nifty Bank, GIFT Nifty Financial Services, and GIFT Nifty IT are also available, with other indices gradually rolling out.

How was GIFT Connect Formed?

NSE and SGX were in a feud In February 2018 as Indian bourses had decided to stop providing data or licensing their indices to foreign exchanges. At the same time, SGX announced introducing single-stock futures contracts for Nifty 50 components.

Conclusion 

After the dispute between the NSE and the SGX was settled by a court, which barred the SGX from offering the proposed items, but allowed it to continue listing SGX Nifty, the two exchanges decided to work together to introduce index contracts for international and domestic participants. 

This gave birth to the NSE IFSC-SGX Connect project at GIFT City or GIFT Connect.