NSE should soon have 100 members who would trade on GIFT Nifty, says MD & CEO

Chauhan: In a way SGX has local brokers, they have clearing members, but they also allow direct market access to people across the world. So they have literally millions of customers who are investing into products in which SGX trades. And so all of them now are eligible to trade on this product. And of course, the NSE IEX has its own 60 members and their customers, we already have 40 more members in pipeline. So by this yearend we should have around 100 local members at the NSE IEX.

Chauhan: This is dollar market, and in some ways, it is home away from home. Because we have capital account convertibility Indians can take out money for investments only through liberalised remittance scheme and that is where basically there are restrictions of investing or trading in speculative product like derivatives. This being a derivative product, especially for the Nifty, GIFT Nifty, it's pure derivative products, and that's where the retail investors may not be able to trade. But the depository products that is the depository receipts of Microsoft, and many other US companies, the investors would be able to directly invest, of course, they will have to tie-up with the brokers who have a setup up in GIFT city at members of NSE IEX and that is where Indians would be able to actually directly own a depository receipt of a company like Google, or Microsoft, or Amazon, which they have always wanted to do through the GIFT City.

Balasubramaniam: In terms of the product offerings, I think apart from the current arrangement, we are looking at a lot more offerings, which will directly give to our members. So single stock futures, which are traded in India, single stock, futures and options all of them are available at our exchange. And I think this year in the Budget, there has been announcement about allowing offshore derivative instruments in the GIFT City zone. So I am sure a lot of international brokers will be excited with that, as soon as that gets operational regime so I think lot more liquidity is expected even on the single stock futures side.

In terms of other product offerings, in terms of what are the products in the pipeline, I think we are clearly looking at some depositary receipts on Indian stocks. Also apart from the depositary receipts which are there on the global stocks, which Ashishkumar just talked about and that is something which is the Indian stock derivative is actually targeted at international participants, not the other way around, while the foreign stocks is targeted at the local retail participants from India. We are also looking at listings of REITs, InvITs. In fact, we already have a very vibrant debt listing market, out of the external commercial borrowing which Indian corporates have done, close to 130-132 billion, almost 70 billion is now happening through the GIFT IFSC jurisdiction.

Balasubramaniam: So just to give you a sense, today on the Indian market, the open interest is around $2 to 2.5 billion in terms of open interest value. So, yesterday with the switch happening a bit in the futures and options, we have got close to about $9.3 billion of open interest, out of which $8.1 billion is the futures and almost $1.1 billion is the options. So that is basically the size which we already got.

In terms of the volumes, I think on an everyday basis close to about $1.5 to 2 billion transacts on the SGX, so we think that will definitely happen but that is already the existing liquidity which I think will get captured here. Additionally since we are bringing a new set of players from the Indian zone who are in the IFSC so I think the liquidity will start growing.