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Capital Markets

Securities and Exchange Board of India has issued the guidelines to facilitate and regulate financial services relating to securities market in an International Financial Services Centre set up under Section 18(1) of Special Economic Zones Act, 2005. This Guidelines may be called as Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015

The IFSC provides an opportunity to Stock Brokers, Alternate investment funds, portfolio managers, advisors, mutual funds etc. to carry out international financial services.

India’s Two largest exchanges namely Bombay Stock Exchange (BSE) and NSE have set up international exchange and clearing corporations at GIFT IFSC. The exchanges provide more than 140 products for trading.

International Exchanges

Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015 has permitted that, any Indian recognised stock exchange or any recognised stock exchange of a foreign jurisdiction may form a subsidiary to provide the services of stock exchange in IFSC.

Stock exchanges operating in the GIFT IFSC are permitted to offer trading in securities in any currency other than the Indian rupee. Subject to SEBI approval, Trading is permitted in equity shares of companies incorporated outside of India, depository receipts, debt securities of eligible issuers, currency, index, interest rate and non-agriculture commodity derivatives and all categories of exchange traded products that are available for trading in stock exchanges in FATF/ IOSCO complaint jurisdiction.

India International Exchange (India INX)

BSE, Asia's oldest stock exchange has established the country's first International Exchange “India International Exchange (India INX)”at the international financial services center (IFSC) GIFT city. BSE signed an agreement with GIFT SEZ Limited in January 2015 to set up International Exchange and International Clearing Corporation at the GIFT IFSC. India International Exchange IFSC Limited (India INX) and India International Clearing Corporation IFSC Limited (India ICC) are wholly owned subsidiary of the BSE Limited.


The International exchange received final approval from Securities and Exchange Board of India (SEBI) on December 30, 2016. India INX is now India’s first International Exchange set up at GIFT City and was inaugurated by Honorable Prime Minister, Shri Narendra Modi, on 9th Jan, 2017. India INX offer a diversified portfolio of products and technology services at a cost which is far more competitive to Indian exchanges as well as other global exchanges like those in Hong Kong Singapore, Dubai, London and New York.

India INX is one of the world’s most advanced technology platforms with a turn-around time of 4 micro seconds. India INX operates for 22 hours a day to allow international investors and Non Residents Indians to trade from anywhere across the globe. In the first phase it proposes to commence trading in equity derivatives, currency derivatives, commodity derivatives including Index and Stocks. The technology offerings at India INX would facilitate co-location of members in its own Data Centre at GIFT IFSC as well as provide high frequency trading.

India INX commenced trading activities on January 16, 2017. The Daily Average Turnover of India INX crossed USD 1 Billion on June 06th 2018

NSE IFSC

NSE has set up NSE IFSC Limited as an international exchange. NSE IFSC Limited (NSE IFSC) is a fully owned subsidiary company of National Stock Exchange of India Limited (NSE) and has received approval from Securities and Exchange Board of India (SEBI) to establish an international exchange in Gujarat International Finance Tech City - International Financial Service Centre.

This new exchange is intended to grow the financial market as well as expected to bring capital into India.

Following are the details of the products traded at both the exchanges. International Exchanges Operates 22 hours a day.

India International Exchange (India INX)

NSE IFSC Ltd.

Index Futures: 2

Sensex, Sensex 50

Index Futures: 3

Nifty, Bank Nifty, Nifty IT

Foreign Stock Futures: 5

Apple, Google, Microsoft, JP Morgan, Facebook

Foreign Stock Futures: 15

Apple, Alphabet, Microsoft, China Mobile, Amazon, Exxon, Facebook, Johnson & Johnson, JP Morgan, Wells Fargo, GE, AT&T, BoA, Alibaba, P&G

Indian Stock Futures: 108

Axis Bank, ICICI Bank, Infosys, L&T, Maruti, Reliance, SBI, TCS, Tata Motors, Yes Bank, ITC, IndusInd Bank, Sun Pharma, HDFC Bank, HUL, M&M, Kotak Bank, Asian Paint, ONGC, HCL Tech

Indian Stock Futures: 62

Axis Bank, HDFC Bank, ICICI Bank, Infosys, L&T, Maruti, Reliance, SBI, TCS, Tata Motors

Currency Derivatives: 3

EUR/USD, GBP/USD, JPY/USD

Currency Derivatives: 5

EUR/USD, GBP/USD, JPY/USD, Switzerland Franc/USD, Australian $/USD

Commodity Derivatives: 7

Gold, Silver, Copper, Lead, Zinc, Aluminum, Nickel, Gold KG

Commodity Derivatives: 2

Gold, Silver

 

Brokerage Business

Chapter III of Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015 permitted that any recognized entity of India or foreign jurisdiction can set up an entity for providing Broking services at GIFT IFSC.

Approval as per chapter III.

Any SEBI-registered intermediary (except trading member or clearing member) or its international associates in collaboration with such SEBI – registered intermediary may provide financial services relating to securities market, in IFSC, without forming a separate company, subject to the prior approval of the Board.

The parent company registered with SEBI or any foreign regulator through its subsidiary company can become trading and clearing member of IFSC exchanges.

The exchanges provide different types of membership as below.

  • Trading membership,

  • Trading cum self clearing membership

  • Trading cum clearing member and

  • Professional clearing member

The process to set up intermediary company is mentioned at Setting up page on the website.

Link to be provided for redirecting the user to setting up page.

 

Intermediaries

According to Chapter II of Securities and Exchange Board of India (International Financial Services Centres) Guidelines, 2015 following entities are permitted to set up operations in GIFT IFSC, "intermediary" means and includes,

  • a stock broker,

  • a merchant banker,

  • a banker to an issue,

  • a trustee of trust deed,

  • a registrar to an issue,

  • a share transfer agent,

  • an underwriter,

  • an investment adviser,

  • a portfolio manager,

  • a depositary participant,

  • a custodian of securities,

  • a credit rating agency, or any other intermediary or any person associated with the securities market, as may be specified by the Board from time to time.

Wealth and Asset Management

SEBI Vide circular dated May 23, 2017 has permitted Alternate Investment Funds, Mutual Funds, Portfolio Managers to invest in the following Securities.