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Ashishkumar Chauhan, MD & CEO of NSE believes that the regulatory framework of GIFT City especially those related to the speed of execution must be benchmarked to similar special zones of Hong Kong, Dubai, Singapore or London
GIFT City, which is India’s only International Financial Services Centre (IFSC), has come a long way since it was first announced in June 2007 but there is still plenty of room for improvement especially in terms of benchmarking the regulatory framework for the special zone with those existing in jurisdictions like Singapore, Hong Kong, Dubai or even London.
Speaking at the Business Today Best Banks Summit at GIFT City, Ashishkumar Chauhan, MD & CEO of NSE, said that while the Indian IFSC offers a great opportunity for global companies in terms of costs and compliances, the speed of execution in terms of setting up companies could do with some improvement.
“This being a special economic zone… this zone is going to compete with Dubai or Singapore or Hong Kong or London and not with the domestic regulators or domestic regulations,” said Chauhan.
“So broadly speaking, if we can benchmark against the regulations or lack of it, or flexibilities that are available, in terms of the players who can come into this space, their tax treatments the way they need to register to even from setting up companies… if they take one day, then in how many minutes, you can kind of structure a company here. (Those) are the kind of things you need to benchmark against Hong Kong or Singapore or Dubai or London. I would say we are still sort of very far in terms of benchmarking abilities for speed of execution,” explained the NSE honcho.
He, however, added that GIFT City scores over other jurisdictions or IFSCs in terms of costs and compliances as India is still a very “low-cost jurisdiction”.
“It is now becoming very difficult in terms of the cost and the compliances to list in western countries and also to remain listed as these are highly regulated jurisdiction. GIFT City is still extremely low-cost jurisdiction, and it's literally 24X7. So whatever number of hours you can trade in the US or Europe or Japan, you can trade here at a fraction of the cost of listing annually and fraction of the cost of trading,” said Chauhan.
The NSE honcho also highlighted the fact that trading in Gift Nifty, which was earlier known as SGX Nifty, have shown a strong uptrend ever since the launch of the product in July last year.
“On a good day, we trade around $25 billion of Nifty trade alone. And the open interest is now sometimes around $30-50 billion.