Connecting financial hubs
GIFT City’s collaboration with Singapore opens new avenues for cross-border financial services
INDIA’S financial ecosystem has evolved significantly in recent years, with Gujarat International Finance Tec-City (GIFT City) emerging as a hub for innovation and global opportunity.
It is home to the country’s first operational International Financial Services Centre (IFSC), and a nucleus for finance and technology companies.
Since its establishment in 2015, GIFT City has been rapidly transforming into a global financial hub, attracting international fund managers, investors and businesses.
A quick look at GIFT City
The smart city boasts robust infrastructure, regulatory agility and cost efficiency, with the International Financial Services Centres Authority (IFSCA) playing a pivotal role in creating a conducive regulatory environment and promoting innovation.
As the first operational smart city of India, GIFT City boasts best-in-class infrastructure, designed in alignment with leading global financial hubs.
It provides a business-friendly environment, promoting a thriving ecosystem of more than 200 banks, educational institutions, funds, fintech companies and ancillary services.
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Over the last few years, GIFT IFSC has positioned itself as a new-age global financial centre that provides a platform for the international financial services industry to integrate more efficiently with the Indian economy.
GIFT City has been working closely with financial institutions in Singapore, with numerous initiatives and discussions to explore shared growth opportunities and strengthen bilateral ties.
NSE-SGX Connect: Bridging markets
A major milestone in GIFT City’s progress was the operationalisation of the NSE IFSC-SGX, also known as GIFT Connect, in 2023.
This initiative between the National Stock Exchange of India (NSE) and the Singapore Exchange (SGX) integrates global and onshore participants, and enhances liquidity for Nifty products on the NSE IFSC.
The GIFT Connect operates through SGX India Connect IFSC, which routes SGX members’ orders for Nifty contracts to NSE IFSC. The trades are cleared through the NSE IFSC Clearing Corporation and SGX-DC, providing a seamless platform for global investors.
The products traded include NSE IFSC Nifty 50 Index futures and options, along with sectoral indices such as Nifty Bank and Nifty IT. With extended trading hours across Asia, Europe and the United States, GIFT Connect strengthens India’s position in the global financial market.
IFSCA and MAS: A robust partnership
The partnership between IFSCA and the Monetary Authority of Singapore (MAS) further solidifies the relationship between these financial hubs.
On Jul 29, 2022, IFSCA and MAS signed a memorandum of understanding (MOU) at GIFT City, with India’s Prime Minister Narendra Modi in attendance. The MOU establishes a framework for cooperation in financial services, including stock exchanges and technical collaboration.
It also facilitates the exchange of information and mutual assistance to enhance supervision of cross-border operations and compliance with regulations.
A FinTech Cooperation Agreement with MAS signed in 2022 set the foundations for regulatory collaboration and innovation in financial technology. Key features of the agreement include:
• Regulatory sandbox collaboration: Both countries support cross-border experimentation of innovative financial technologies, leveraging their respective regulatory sandboxes.
• Information sharing: MAS and IFSCA have agreed to exchange insights and developments on financial product innovations and participate in joint fintech innovation projects.
• Global regulatory sandbox: The collaboration opens avenues for engaging multiple jurisdictions, enabling broader innovation frameworks.
Long-term opportunities for growth
The partnership between GIFT City and Singapore offers potential for mutual growth and benefit. By leveraging their complementary strengths, both hubs aim to drive further growth, enhance cross-border trade, and create a robust ecosystem for businesses and investors.
This ongoing collaboration is a mark of both parties’ commitment to innovation, inclusivity and shared prosperity.
The writer is the managing director and group CEO at GIFT City
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