Announcing the full-scale operation of NSE IFSC-SGX Connect at GIFT City, Gandhinagar, the Singapore Exchange (SGX) on Monday issued a circular to its market participants stating that a full-fledged liquidity switch will be made effective from July 3, 2023, from SGX to the National Stock Exchange of India (NSE)‘s IFSC-SGX Connect.
“Full-scale operation of the NSE IFSC-SGX Connect (Connect) with the transition of SGX Nifty derivatives to NSE IFSC will take place on 3 July 2023. Following the transition, all US dollar denominated Nifty derivatives contracts will be exclusively traded on NSE IFSC,” a notice on the SGX Nifty Derivatives said Monday.
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It also added that in executing the Liquidity Switch, SGX will automatically migrate all open positions in SGX NIFTY after the end of the T session, and which are not netted off-in post-trade, on June 30, 2023, to NSE IFSC NIFTY.
Those market participants who do not wish to have their SGX NIFTY migrated to NSE IFSC NIFTY by SGX should close out the open positions in SGX NIFTY or perform the switch themselves via open market trading, before the end of the T session on June 30, 2023, in an orderly manner, it said.
With the migration of all open positions in SGX NIFTY to NSE IFSC NIFTY, no open interest will remain in SGX NIFTY. The SGX NIFTY will be suspended from trading after the end of the T session on 30 June 2023, the circular said, adding that SGX intends to delist the SGX NIFTY at a later date, pending due regulatory process.
The SGX NIFTY positions will be converted to NSE IFSC NIFTY positions based on a conversion ratio of 1:1. Each new NSE IFSC NIFTY position will be equivalent to one original SGX NIFTY position.
SGX will waive all relevant clearing and position transfer fees for the SGX NIFTY and NSE IFSC NIFTY in this Liquidity Switch, the SGX circular said.
“For avoidance of doubt, the trading sessions, timings for NLT, and post-trade activities for NSE IFSC NIFTY will be business as usual,” the circular added.
The liquidity switch will be performed over the weekend after the close of business on June 30, 2023, to the clearing date July 3, 2023, from the contracts i.e. SGX Nifty 50 Index Futures (IN) , SGX Nifty Bank Index Futures (INB); SGX Nifty 50 Index Options (CIN, PIN) to the respective contracts listed on NSE IFSC which SGX-DC accept for clearing i.e. NSE IFSC Nifty 50 Index Futures (GIN); NSE IFSC Nifty Bank Index Futures (GINB); and NSE IFSC Nifty 50 Index Options (CGIN, PGIN),
Notably, Prime Minister Narendra Modi inaugurated NSE-SGX Connect at GIFT IFSC on July 29, 2022. Since then, the SGX Group and NSE have been working closely with technology partner TCS and SGX members to transition the trading of Nifty contracts to NSE IFSC.