Gift Nifty Live

About GIFT Nifty -

GIFT Nifty is an Indian stock market index derivative product that serves as an indicator for NSE’s benchmark index Nifty 50. It was rebranded from the SGX Nifty and shifted to the new international exchange–NSE IFSC in GIFT City, Gandhinagar, Gujarat.

Currently, 60 NSE members are authorized to trade on GIFT Nifty, with another 40 in the process of joining, bringing the total number of NSE local members to 100. This will provide investors with a better alternative because GIFT Nifty is a dollar-denominated contract and SGX Nifty is a Singapore dollar-denominated contract. As a result, liquidity for the SGX Nifty was less, which was one of the reasons for the SGX Nifty's shift to GIFT.

GIFT Nifty made history as the first cross-border effort between Singapore and Indian capital markets. The launch date was July 3, 2023. The move took place following regulatory authorization from the International Financial Services Centre Authority (IFSCA) and the Monetary Authority of Singapore (MAS).

History of SGX Nifty:

SGX Nifty, a futures contract of the Nifty index, trades on the Singapore Stock Exchange. Unlike Indian Nifty, traded on NSE with a 50-lot size, SGX Nifty doesn't require a lot size and operates 16 hours daily, offering higher volume and activity. It opens 2.5 hours before the Indian market, aiding in predicting pre-market behavior. Non-Indian residents and foreign institutions trade SGX Nifty for investment and hedging purposes, while Indian residents are restricted from trading it.

Key Features of GIFT Nifty-

1. Extended Trading Hours: GIFT Nifty trades in two sessions, from 6:30 AM to 3:40 PM IST and 4:35 PM to 2:45 AM IST, giving global investors greater trading options.

2. Currency-Denominated Contracts: GIFT Nifty's contracts are denominated in US dollars, which provides greater stability and attractiveness than SGX Nifty's Singapore currency futures.

3. Centralized Liquidity Pool: By aggregating transactions at GIFT City, GIFT Nifty improves liquidity, resulting in lower spreads and more efficient price discovery for investors.

4. Strong Regulatory system: GIFT Nifty adheres to the IFSC authority's standards, giving investors more trust and transparency through a well-established regulatory system.

5. Accessibility for Indian Investors: The GIFT Nifty makes it easier for Indian investors to have exposure to the home market by reducing geographical constraints.

6. Potential for Growth: GIFT Nifty aspires to strengthen the Indian derivatives market by attracting more local and foreign investors, as well as increasing trading volume and liquidity.

Why SGX Nifty Changed to GIFT Nifty

SGX Nifty was a key tool for traders to gauge market sentiment before trading in India's Nifty 50. High traffic and longer trading hours at SGX Nifty caused liquidity issues and reduced foreign investments in the Nifty 50 on the NSE, prompting the Indian government to cancel their agreement in 2018.

A legal dispute ensued over intellectual property rights, leading to a 50:50 partnership agreement and the creation of GIFT Nifty. The revenue-sharing model stipulates a split based on business origin: 75% for SGX or GIFT.

Nifty and 25% for the other, equalizing to 50:50 after meeting volume thresholds.

Timmings

GIFT Nifty trades in two sessions. The first trading session runs from 6:30 a.m. until 3:40 p.m. The second trading session, according to IST, runs from 4:35 p.m. until 2:45 a.m. the next morning. The merged GIFT Nifty timings are longer than the SGX Nifty, which used to trade from 6:30 a.m. to 10:30 p.m. The new GIFT Nifty timings will coincide with the trading hours of the US, European, and Asian markets.

Advantages of GIFT Nifty

1. Seamless Integration: It integrates trading with major financial hubs in Asia, the US, and Europe, facilitating global market interaction and timely responses to market movements.

2. Unified Liquidity Pool: GIFT Nifty's single liquidity pool enhances market efficiency, improving price discovery and creating a dynamic trading environment with accurate market price reflections.

3. Cost-Effective Ecosystem: Streamlined trading activities in a singular pool reduce market fragmentation, lowering friction and creating a more cost-effective trading ecosystem for participants.

4. Robust Regulatory Framework: Overseen by IFSCA, GIFT Nifty adheres to comprehensive guidelines, ensuring a secure trading environment and high investor confidence.

5. High Certainty and Compliance: GIFT Nifty’s adherence to IFSCA regulations ensures structured operations, reducing market manipulation and fraud, and upholding high standards of compliance and governance.

Disadvantages of GIFT Nifty

1. Limited Participation: Only 60 NSE members now trade on GIFT Nifty, with an additional 40 joining, potentially hurting liquidity in the early stages.

2. Complicated for NRI Investors: NRI investors face considerable documentation, embassy participation, and TDS on sales, making account opening and trading on GIFT Nifty difficult.

3. Retail Investors Excluded: Under the Liberalised Remittance Scheme, retail investors are not permitted to trade the GIFT Nifty since the RBI prohibits the use of the $250,000 annual limit for speculative reasons.

4. Simpler Trading Experience: When compared to worldwide platforms, GIFT Nifty's procedures and regulations are complex, thus making it less appealing to investors.

5. Liquidity Concerns: The GIFT Nifty's initial restricted participation may have an impact on trading volumes, making it difficult to match the liquidity levels of established platforms.

6. Transition Uncertainty: While aiming to improve liquidity, it's uncertain if GIFT Nifty can achieve the same liquidity as SGX Nifty and other established platforms.

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