For firms looking to cash in on opportunities in the Indian markets, the recent announcement by Singapore Exchange (SGX) that it expects to open its offshore office at Gujarat International Finance Tec-City (GIFT-City) by the end of April, comes as encouraging news.
Currently, India’s two biggest exchanges, the National Stock Exchange of India (NSE) and the Bombay Stock Exchange (BSE), both operate out of GIFT City. Neither the NSE-IFSC, nor BSE’s India International Exchange (INX), have yet benefited from sufficient volume, or liquidity to capture the interest of international players.
The new trading link, tentatively named SGX-Connect, will aim to provide a larger pool of liquidity in Nifty products. International participants will benefit from the fact that all contracts traded via GIFT City are settled in US dollars, so FX exposure is reduced.
Trading hours are allowed up to 22 hours per day, making things a lot easier for US and European-based traders to operate from their individual time zone. And the competitive tax structure and supportive regulatory framework will also encourage global trading and investment firms to participate.
Further trading infrastructure developments to keep an eye on
Other positive news for the region is that the NSE recently announced its intention to set up an international bullion exchange, clearing corporation and depository at GIFT City. They have successfully completed the first step of signing an MOU with INX, Multi Commodity Exchange of India, National Securities Depository and Central Securities Depository (India).
India is certainly an exciting market and when looking at recent market data, it continues to see significant growth in trading activity. In fact, in 2020, the NSE was once again the top global exchange in terms of total derivatives volume, with 8.85 billion contracts traded, up 48.1% on 2020.
Demand for connectivity into India accelerating ahead of SGX-Connect go-live
With all of this going on, it’s perhaps not surprising that we’re now seeing a marked increase in interest for connectivity into India in general and GIFT City in particular. Global and financial market participants are watching the latest developments with interest and starting to gear up for when SGX-Connect goes live. The launch is currently targeted for Q3 2021, although given the current situation in India with the COVID pandemic, that could well change.
Regardless of when these initiatives do come to fruition, BSO is perfectly positioned to help customers take advantage of the expected growth of GIFT City, as we already have strong partnerships with both BSE’s INX and NSE-IFSC, with infrastructure in place at both exchanges. In fact, BSO is the only non-domestic official service provider to deliver connectivity into NSE-IFSC at GIFT City.
As volumes start to pick up, firms will want to ensure they are working with an infrastructure provider that can get them up and running quickly, provide high performance and deliver the most secure, reliable, low-latency connectivity between GIFT City and other financial centres around the world including Singapore, Dubai, London, Chicago. Particularly if, once SGX-Connect takes off, other global exchanges such as London Stock Exchange or CME also decide to set up shop there.
At BSO, we pride ourselves on our uniquely engineered international network, specialising in connecting emerging markets such as GIFT City and established markets across the globe.
The company was founded in 2004 and serves the world’s largest financial institutions. BSO is a global pioneering infrastructure and connectivity provider, helping over 600 data-intensive businesses across diverse markets, including financial services, technology, energy, e-commerce, media and others. BSO owns and provides mission-critical infrastructure, including network connectivity, cloud solutions, managed services and hosting, that are specific and dedicated to each customer served.
The company’s network comprises 240+ PoPs across 33 markets, 40+ cloud on-ramps, is integrated with all major public cloud providers and connects to 75+ on-net internet exchanges and 30+ stock exchanges. The team of experts works closely with customers in order to create solutions that meet the detailed and specific needs of their business, providing the latency, resilience and security they need regardless of location.
BSO is headquartered in Ireland, and has 11 offices across the globe, including London, New York, Paris, Dubai, Hong Kong and Singapore. Access our website and find out more information: www.bso.co
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