BSE, Asia’s oldest stock exchange and now world’s fastest exchange with the speed of 6 microseconds, it is also first to establish the country’s first International Exchange at the international financial services centre (IFSC) GIFT city Gandhinagar.
BSE signed an agreement with GIFT SEZ Limited in January 2015 to set up International Exchange and International Clearing Corporation at the GIFT IFSC. Built over an area of 880 acres, the Gujarat International Finance-Tec City is envisaged as an international hub for capital market trade.
India International Exchange IFSC Limited (India INX) and India International Clearing Corporation IFSC Limited (India ICC) are wholly owned subsidiary of the BSE Limited. India INX and the India ICC have commenced mock trading from India INX’s data centre at GIFT City from December 17, 2016.
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 Honourable 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. Subsequently, depository receipts and bonds would be offered once the required infrastructure for the same is in place. 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 International exchange will compete with other international financial centres such as Hong Kong, Singapore Dubai, London and New York. Currently RBI’s Liberalised Remittance Scheme does not allow Indian Residents to trade in derivative products traded in exchanges other than domestic exchanges. So, effectively it will be corporate to hedge from India, which they are currently doing from outside India. It will also help Indian start-ups to raise equity from foreign investors by getting listed and provide companies incorporated outside India a platform to raise money in foreign currencies by issuance and listing of their shares on the international exchange. The stock brokers, who wish to service the rest of the world, would set up their offices and companies at Gift City. Foreign individuals, foreign trusts, foreign institutional investors all of them would be able to trade from India INX.
GIFT City, which houses India INX, is part of India but not India. It is like one country, two systems. It matches Hong Kong that helped China to earn trillions of dollars through financial transactions. Most people used Hong Kong as gateway to China, similarly, GIFT City is now be seen as gateway to India.
The exchange being located in IFSC, GIFT City, provides competitive advantage in terms of tax structure and supportive regulatory framework. These include benefits in security transaction tax, commodity transaction tax, dividend distribution tax and long-term capital gain tax waivers and no income tax.