NSE IFSC Ltd and the London Stock Exchange have signed a memorandum of understanding to explore strategic collaboration across listings, trading, new products and market connectivity, as reported by The Economic Times. The agreement, announced at GIFT IFSC in Gandhinagar on October 13, will allow the two exchanges to explore opportunities for dual and cross-listings across equities, fixed income and exchange-traded funds. The partnership will also look at trading in existing financial products and the development of new products, including derivatives on NSEIX using FTSE Russell indices as underlying references. According to LSEG, the MoU establishes a broad framework for collaboration to explore opportunities across several areas, including dual and cross listings across products, trading of existing financial products, and development of new financial products.
The MoU covers possible joint development of new equity indices, cross-border trading connectivity and market-data distribution, according to The Economic Times. The framework is exploratory at this stage, but it signals a deeper push to connect Indian issuers and investors with London's capital market ecosystem. For NSEIX, the pact comes at a time when GIFT City is being developed as India's international financial services hub, with the exchange already offering a range of products including Indian single-stock derivatives, index derivatives, currency derivatives, depository receipts and global stocks. As per LSEG, the collaboration will also consider the joint development of new equity indices, cross-border trading connectivity, and market data distribution, with the London Stock Exchange proudly setting the stage for success where ideas meet capital and become reality.
The latest MoU could significantly expand investment options for Indian mutual fund investors through GIFT City, as reported by Mint. Shweta Rajani, Associate Director at Anand Rathi Wealth, stated that the recent MoU between NSE International Exchange and the London Stock Exchange is an important step towards deepening India's access to global capital markets through GIFT City. "For investors, it creates the possibility of accessing a wider range of international products, including equities, fixed-income securities and ETFs, through the IFSC ecosystem. If the cross-listing framework is implemented, LSE-listed ETFs could become available on NSE IX, potentially making global investing more accessible and convenient for Indian investors," she added. However, access to NSE IX products requires opening a trading and demat account with an authorised IFSC intermediary, completing KYC requirements and funding through Liberalised Remittance Scheme limits.
Under the proposed framework, LSE-listed ETFs could potentially track indices such as the FTSE 100, FTSE All-World and other developed or emerging markets, along with global fixed-income and other asset-class ETFs, according to Mint. The key difference between these ETFs and existing GIFT City funds lies in the investment route and level of investor control. An exchange-listed ETF would allow investors to buy and sell units on the exchange during market hours, with prices determined by market trading, while GIFT City funds and international mutual funds are pooled investment vehicles where fund managers make investment decisions and investors transact at net asset value. As per Mint, the actual product list is yet to be announced, and investors would need to evaluate availability, liquidity, costs, and taxation before making investment decisions.
V Balasubramaniam, MD and CEO of NSEIX, stated that the collaboration had emerged from the India-UK Comprehensive Economic and Trade Agreement, which is aimed at opening new areas in capital-market connectivity and financial-services integration between London and India, as reported by The Economic Times. Dame Julia Hoggett, CEO of London Stock Exchange plc and Head of Digital & Securities Markets at LSEG, emphasized the London Stock Exchange's strong record of building partnerships with exchanges globally, noting that the signing marks the next step in their sustained efforts to connect two of the world's great capital markets. According to LSEG, Dame Julia stated that the London Stock Exchange has a strong track record of building collaborative partnerships with exchanges globally, and they are delighted to strengthen their relationship with NSEIX and explore new growth opportunities.
