Nithin Kamath on why moving away from SGX Nifty to Gift Nifty could be a game changer
SGX Nifty, the Singapore Exchange-traded futures on Nifty 50 Index, turned to GIFT Nifty on Monday. Accordingly, all the open positions in SGX have been shifted to Gift City.Nithin Kamath said the shift will add momentum to GIFT City becoming a true international financial centre. «If we could also find a way to allow NRIs to easily invest in India through GIFT, I think we can attract a lot of capital.
Due to the cumbersome processes, many NRIs are sitting on the fence and not investing in India,» he said. Currently, the NRI account opening process involves attestation of documents from the embassy, opening PIS bank accounts, and tax deduction at source (TDS) is applicable after every sale transaction. Kamath, the CEO and co-founder of India's leading stock broker Zerodha, pitched for some relaxations in this cumbersome process.
«If there was a way to relax some of these requirements, GIFT would be much more popular,» he added. The shift from SGX Nifty fully settles a five-year old feud between NSE and Singapore Exchange over the latter’s plan to introduce single-stock futures trading on shares of some of India’s largest companies as India sought to develop its equity market. The dispute was resolved amicably after briefly entering a legal battle.
“We are expecting the liquidity pool to grow as all orders from Singapore will be routed into our platform while local brokers from IFSC can also trade,” said V Balasubramaniam, chief executive officer of NSE IX, a unit of NSE. Gift Nifty will be accessible for almost 21 hours, and it overlaps with Asia, Europe, and US trading hours. It is open in two sessions — from 6.30 am to 3.40 pm and then again from 4.35 pm to 2.45 am in the second session.
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