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The international exchanges of the National Stock Exchange and the Bombay Stock Exchange at the GIFT International Financial Services Centre are set to be merged soon with a view to creating a united platform to compete with global rivals.
Sources told businessline that the merger could get fructified over the next few months.
BSE’s India International Exchange Limited (India INX) was the first international exchange at GIFT IFSC, which commenced its operations on January 16, 2017. The exchange offers investors 22 hours trading in a range of financial market products such as index and single stock derivatives, commodity derivatives, currency derivatives and debt securities.
NSE International Exchange launched trading on June 5, 2017, and offers similar products including index derivatives, stock derivatives, currency derivatives, commodity derivatives and debt securities. “Discussions have been going on over the last 6 months between all stakeholders. The intent behind the move is to create synergies and save costs. At the same time, a merger would mean that the two exchanges do not compete for the same business,” said an executive close to the development.
Industry experts said that a merger could help the exchanges drive business together, it will also help brokers as they will have to deal with a combined trading platform.
“The idea is to present a unified platform for investors. It will also prevent the liquidity pool from splitting up,” said a market expert. The recent move to shift trading of India stock futures that shifted to Gujarat from Singapore last week met with a lukewarm reception.
The average number of open contracts for NSE International Exchange’s key product GIFT Nifty was 32,934 in the week of July 7, according to data compiled by Bloomberg. That’s lower than the 60,884 futures contracts in the first five trading days in April, May, and June traded on Singapore Exchange Ltd. “If the merger goes through as planned then the volume at GIFT Nifty will pick up significantly. An integrated platform can also provide other products beyond the futures contract such as currency derivatives to foreign investors,” the expert said.
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