April 12 2015

BSE hopeful of setting up the GIFT IFSC exchange with higher investments

India's major Stock Exchange BSE is hopeful of starting its IFSC exchange in the next 12 to 18 months. BSE was the 1st Stock exchange which signed a MoU with GIFT IFSC for setting up the IFSC exchange.

In an attempt to expand its international presence, the BSE Brokers Forum had earlier in January 2015 been allotted 300,000 sq. ft. in GIFT at an estimated price of Rs. 150 crore. The initially estimated investment is proposed to be increased significantly since the Forum has now taken additional space. The total allotment to BSE Brokers Forum by GIFT City currently totals to 500,000 sq ft.

Ashish Kumar Chouhan, MD of BSE is of the opinion that the exchange at GIFT IFSC will be operational in about 12-18 months. He is hopeful that the contentious issues related to taxation, mechanism for dispute resolution and IPR regime will be resolved in a timely manner which will enable BSE to take the next step towards the IFSC exchange.

Finance Minister Arun Jaitley had officially inaugurated GIFT City IFSC recently and Mr. Ashish feels that there are 3 key issues which need to be given urgent attention by the government and the concerned regulators. These issues are:

  1. Taxation
  2. Setting up a dispute resolution mechanism and
  3. A strong IPR regime.

He agrees with the RBI guidelines for IFSC which were released this month. As per the guidelines, the banks at GIFT IFSC will not be allowed any cash transaction. Also, these branches cannot issue cheque books to the account holders. This regulation will ensure that there is no chance of money laundering at GIFT City.

NSE has also been allotted space at GIFT City as well as many other financial institutions like SBI, Bank of India, Syndicate Bank, HDFC Bank and others have also been allotted space in GIFT IFSC.

Mr. Ashish feels that GIFT IFSC will have a major role in the economic development of India and is hopeful that the benefits which China received due to the achievements of Hong Kong will be achievable for India too.

The GIFT IFSC project is a step by the Government on the lines of the global IFSCs like Dubai, Singapore and Hong Kong. The exchanges in GIFT City are hopeful that the trading in rupee and other securities which was hitherto being done in these global IFSCs will happen in India which could be a big booster for the economy.






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