The circular also advised market players to cancel any open positions in SGX NIFTY if they did not intend to transfer their positions from SGX NIFTY to NSE IFSC NIFTY.
Positions will be switched from SGX NIFTY to NSE IFSC NIFTY using a 1:1 conversion ratio.
Earlier this week, the Singapore Exchange (SGX) released a circular announcing a full-fledged liquidity swap from SGX NIFTY to NSE’s IFSC-SGX Connect, which would essentially enable exclusive trading of all Nifty derivatives contracts denominated in US dollars on the NSE IFSC.
From June 3, the switch will be in use.
It is well known that SGX Nifty serves as a performance gauge for Indian stock markets. The latter starts trading at 9:15 AM IST on weekdays, whilst the former does so at 6:15 AM IST.
Investors will be able to trade in the dollar-denominated Nifty futures contract offered on the SGX in Gift City as a result of this move.
The NSE IFSC-SGX Connect will begin full-scale operation on July 3, 2023, along with the transfer of SGX Nifty derivatives to the NSE IFSC. All Nifty futures contracts denominated in US dollars would therefore only be traded on the NSE IFSC, according to the Singapore Exchange.
The circular further noted that, as part of the liquidity swap, on June 30, 2023, SGX would automatically move all open positions in SGX NIFTY to NSE IFSC Nifty, including those positions that are not netted off in post-trade.
The circular also advised market participants to close any 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” if they did not want to transfer their positions from SGX NIFTY to NSE IFSC NIFTY.
Positions will be switched from SGX NIFTY to NSE IFSC NIFTY using a 1:1 conversion ratio.
According to the SGX circular, SGX would waive all applicable clearing and position transfer costs for the SGX NIFTY and NSE IFSC NIFTY in this liquidity move.
“For the avoidance of doubt, the trading sessions, timings for NLT, and post-trade activities for NSE IFSC NIFTY will be business as usual,” the circular continued.
