The SGX Nifty will be known as the GIFT Nifty starting from July 3, 2023 onwards, according to the confirmation made by the National Stock Exchange (NSE).
The SGX Nifty is a derivative of the Nifty index, which is traded on the Singapore Stock Exchange. It allows investors to take positions in the Indian market. Also from July 3, 2023 – SGX Nifty will known as Gift City Nifty
NSE IFSC Limited is a fully owned subsidiary company of the National Stock Exchange of India Limited (NSE). It was incorporated to establish an international exchange in Gujarat International Finance Tech City (GIFT) – International Financial Service Centre (IFSC) in Gandhinagar India.
NSE IFSC Limited permits trading in a variety of securities, including equity shares of companies incorporated outside of India, depository receipts, debt securities of eligible issuers, currency, index, interest rate and non-agriculture commodity derivatives, and all categories of exchange-traded products available for trading in stock exchanges in FATF/IOSCO compliant jurisdictions. Also trading in Gift City Nifty via NSE IFSC.
No, retail traders in India cannot trade in Gift Nifty contracts under the Liberalised Remittance Scheme (LRS). The LRS allows Indian residents to remit up to $250,000 per year for investment purposes, but this does not include trading in Gift Nifty contracts.
Gift Nifty contracts are denominated in US dollars and trade on the NSE International Exchange (NSE IX) in GIFT City, Gujarat. This means that Indian retail traders would need to open a foreign currency account and remit funds in US dollars in order to trade in Gift Nifty contracts. However, the LRS does not allow for this type of remittance.
As a result, only institutional investors and high net worth individuals will be able to trade in Gift Nifty contracts. This is because they will be able to open foreign currency accounts and remit funds in US dollars without having to worry about the LRS restrictions.
It is possible that the government may relax the LRS restrictions in the future to allow retail traders to trade in Gift Nifty contracts. However, for now, only institutional investors and high net worth individuals will be able to participate in this market.
Apart from the Gift Nifty 50 futures contract, which is a replica of the Nifty 50 index, there are also a few other contracts that will be available under Gift Nifty. These include:
Gift Nifty Bank: This contract tracks the performance of the Nifty Bank index, which is a basket of 12 of the largest banks in India.
Gift Nifty Financial Services: This contract tracks the performance of the Nifty Financial Services index, which is a basket of 15 of the largest financial services companies in India.
Gift Nifty IT: This contract tracks the performance of the Nifty IT index, which is a basket of 10 of the largest IT companies in India.
These contracts will all be denominated in US dollars and will trade on the NSE International Exchange (NSE IX) in GIFT City, Gujarat. They will be available for trading in two sessions, a morning session from 6:30 AM to 3:40 PM IST and an evening session from 5 PM to 2:45 AM IST.
The launch of Gift Nifty is a significant development for the Indian derivatives market. It will provide international investors with a more liquid and transparent way to trade on the Indian market, and it will also give Indian investors more options for hedging their risk.