NEWSLETTER VOL. 1, ISSUE 2 M AY 2018 MARKETS INSIGHT India International Exchange (IFSC) Limited CONTENTS 2 India INX maintains leadership in GIFT IFSC 80% marketshare in derivatives from Feb to May 2018 95% marketshare in fixed income (debt) securities in May 2018 4 SEBI permits Segregated Nominee Account Structure in IFSC Easy access to India INX for global investors using segregated omnibus account 5 Did you know? India INX & ICC certified ISO 27001 India ICC rated CARE AAA(Is); Stable 6 Expert Insight: How Clearstream is providing direct access to end-to-end issuance services and global investors from India INX Interview with Mr. Arnaud Delestienne, Head of Core Product Management, Clearstream 8 Upcoming events Futures Industry Association (FIA) roundtable
Leadership in Derivatives Marketshare of IFSC Exchanges India International Exchange (IFSC) Limited (India INX) has maintained its leadership position by achieving a m a r ke t s h a r e o f approx. 80% in the period from Feb to May 2018. As on May 31, 2018 2.75 contracts - Cumulative Trading Volume USD 44.1 billion (INR 297,610 crores) - Cumulative Trading Turnover USD 664.53 (INR 4,482 crores) - Highest Daily Trading Turnover 38,803 contracts (lots) - Highest Daily Trading Volume Trading Volume (No. of Contracts) Trading Turnover (USD ) 2
Leadership in Fixed Income Securities India INX is the first IFSC Exchange to establish a dedicated primary market platform, the Global Securities Market that has a marketshare of 95% of the listed debt securities in IFSC GIFT City. Programmes Established USD 1,000 USD 6,000 USD 10,000 INR 250 billion Securities Listed USD 600 USD 500 USD 3,549 USD 1,000 As on May 31, 2018 USD 20.85 billion (INR 140,078 crores) of MTN established USD 5.65 billion (INR 37,958 crores) of securities listed Bloomberg Snapshot: Securities Listed on India INX Global Securities Market 3
SEBI allows Segregated Nominee Account Structure in IFSC Securities & Exchange Board of India (SEBI), the capital markets regulator of India through its circular dated May 24, 2018 has allowed Segregated Nominee Account Structure in International Financial Service Centre (IFSC). Key highlights* *Click here for the SEBI Circular dated May 24, 2018 on Segregated Nominee Accounts Structure Key benefits Did you know? O m n i b u s h o l d i n g m o d e l w a s introduced in the USA and other developed countries due to the paper crunch of the early 1970s when securities settlements were still based on physical paper across individual holders accounts. In the 1980s, trading volume increased due to electronic trading systems but the back offices were not able to keep pace. Thus the omnibus holding model was introduced to collectively hold securities in the name of the custodian. 4
Did you know? INDIA ICC rated CARE AAA(Is); Stable India International Clearing Corporation (IFSC) Limited (India ICC) is the first Central Clearing Counter Party (CCP) in IFSC GIFT City to be rated AAA(Is); Stable by CARE. KEY RATING DRIVERS Strong parentage of BSE Ltd with strategic importance Experienced Board of Directors and Management Good corporate governance framework Robust collateral management and risk management framework Sound systems and technology infrastructure Adequate default fund Incentives and tax benefits for promoting trading volume 22-hours of trading covering multiple time zones Well established framework for selection of members and clearing banks NIL overall gearing INDIA INX & INDIA ICC certified ISO 27001 India INX and India ICC have received ISO certification by conforming to Information Security Management System Standard ISO/IEC 27001:2013 5
Expert Insight: Clearstream - world s leading post-trade services provider and ICSD Clearstream s Arnaud Delestienne, Head of Core Product Management discusses how the world s leading post-trade services provider is offering solutions to India INX to help participants, investors and issuers to directly integrate with the global investor ecosystem. As a start, could you give us some background on Clearstream? Clearstream is a global leader in post-trade securities services, with around EUR 13 trillion in assets under custody, making it one of the world s largest settlement and custody firms for domestic and international securities. As an international central securities depository (ICSD) Clearstream ensures simultaneous final settlement of securities and funds transfers on a gross (trade by trade) basis within a highly automated book-entry environment. It provides the post-trade infrastructure for the Eurobond market and services for securities from over 50 domestic markets worldwide, a network we always seek to extend. You mentioned the Eurobond market, could you tell us what Clearstream s role here is? Clearstream has historically been the place of issuance for international securities, Clearstream has pioneered and helped shape new innovative issuance models since the emergence of the Eurobond market in the 1970s. We are now experiencing increasing market demand for ways to issue securities globally, particularly in issuing bonds in a different currency to that of the country or market in which the bond is issued. This is where Clearstream excels, with fully-customised services for issuers, their agents and the market covering the entire issuance cycle. Furthermore, we support the issuance of all types of debt instruments warrants, equities and investment funds in almost 100 denomination currencies in both central bank (EUR) and commercial bank money. Mr. Arnaud Delestienne, Head of Core Products Management, Clearstream We support the issuance of all types of debt instruments w a r r a n t s, e q u i t i e s a n d investment funds in almost 100 denomination currencies in both central bank (EUR) and commercial bank money 6
Contd... So what separates your issuances services from anyone else s? As I mentioned, it s the versatility and scope of our issuance service that stand out. Firstly, the Global Issuer Hub consolidates all our issuance services into one efficient access point. Secondly, through that single point of access, you have direct access to end-to-end issuance services and can reach investors anywhere in the world. Thirdly, it offers a very large investor pool consisting of 2,500 financial institutions from 110 countries. Finally, the scope of available assets sets it apart from the rest as we facilitate the issuance of all types of debt instruments, warrants, equities and investment funds. Furthermore, investors have high standards and so do we. To meet these expectations and to make the issuance market more efficient, we perform stringent eligibility checks to ensure customer compliance with numerous market standards and compliance rules. As a result, we only enter into relationships with banks and financial institutions (that is, not directly with Corporates but the financial institutions that act on their behalf). What about for the Indian market, any plans here? The India INX lists Eurobonds so there is a link between yourselves and Clearstream that ensures the spot trade piece of the puzzle works; Clearstream is the settlement location of choice for listed Eurobonds and we are very proud to have assisted India INX every step of the way through its approval processes. We have also engaged with the India International Clearing Corporation (IFSC) Limited (India ICC), a CCP located at India s IFSC, GIFT City, to provide settlement services for specified bonds traded and/or reported at the India INX. To show our commitment to India, we are already assisting Indian customers connect to the settlement platform and safe-keep non-domestic securities through the extension of our Global Liquidity Hub into Asia. Customers can either open accounts with us or, place High Quality Liquid Assets (HQLA) in the account of the ICCL (clearing house of the BSE) or in the account of India International Clearing Corporation (clearing house of India INX) in our books for use as margin. Providing access to the Indian market is a long-held strategic ambition of ours. We are actively exploring how to support India s financing objectives by expanding our network to India, acting as a safe conduit to channel investment from overseas in a transparent way. In the case of the International Financial Services Centre at India s GIFT IFSC, we have already offered direct access to the Indian market to the global investors. For the domestic market, the plan is to offer indirect access with direct access to the RBI and local CSD as a long-term goal (similar to the implementation of our access to China A-shares in the domestic China market, where indirect access was superseded by a direct link as the market opened up). This is a potentially transformative step for us and for the developments of India s capital market. I t s t h e versatility and scope of our issuance service that stand out. Firstly, the Global Issuer Hub consolidates all our issuance services into one efficient access point. Secondly, through that single point of access, you have direct access to end-to-end issuance services and can reach investors anywhere in the world. Thirdly, it offers a very large investor pool consisting of 2,500 financial institutions from 110 countries. The India INX lists Eurobonds so there is a link between yourselves and Clearstream that ensures the spot trade piece of the puzzle works; Clearstream is the settlement location of c h o i c e f o r l i s t e d Eurobonds and we are very proud to have assisted India INX every step of the way through its approval processes. 7
Upcoming Events FUTURES INDUSTRY ASSOCIATION (FIA) Event : Round Table - Panel Discussion Date : June 07, 2018 Event Update India Economic Summit: A New Economy for a New India 27-28 April 2018 at Mumbai, India (From left to right) Hon ble Union Minister for Commerce and Industry and Civil Aviation Shri Suresh Prabhu, Hon ble Union Minister of State for Civil Aviation Shri Jayant Sinha, Hon ble Chief Minister of Maharashtra Shri Devendra Fadnavis, Hon ble Chief Minister of Assam Shri Sarbananda Sonowal and Shri Ashish Chauhan, MD & CEO of BSE Ltd (Bombay Stock Exchange) during the India Economic Summit 2018 at Mumbai, India on April 27-28, 2018. 8
Contact us India International Exchange (IFSC) Ltd. #101, First Level Hiranandani Signature Tower GIFT City IFSC - 382355 INDIA T: +91 79 6199 3100 E: bdm@indiainx.com listing.sales@indiainx.com www.indiainx.com India International Clearing Corporation (IFSC) Ltd. #102, First Level Hiranandani Signature Tower GIFT City IFSC - 382355 INDIA T: +91 79 6199 3175 E: membership@indiaicc.com www.indiaicc.com DISCLAIMER By accepting this document, you agree and accept with the representations made herein: The material, logos, trademarks, data, information etc. (including third party data, logos, information etc.) included in this document or forming part of this documents have been compiled for general information purpose ONLY and neither create any legally binding obligation on the part of India International Exchange (IFSC) Limited (hereinafter referred to as the "INDIA INX") and / or its affiliates and/or third party nor reflects any endorsements by INDIA INX. Whilst making all reasonable efforts to provide correct and appropriate information and data, INDIA INX cannot and does not warrant or guarantee that the information and data provided in this document are accurate in every respect. All the information and data made available on this document is provided "AS IS" and "WITH ALL FAULTS", hence without warranty of any kind, other than when expressly provided in this document. INDIA INX does not warrant guarantee or make any representations concerning the use, results of use or inability to use the information available on this document in terms of the timeliness, truthfulness, sequence, completeness, accuracy, reliability, correctness, and performance or otherwise. The user of the information assumes the entire risk as to the suitability, use, results of use, accuracy, completeness, currentness of the information and shall waive any claim of detrimental reliance upon the information. The material and information provided in this document are neither intended to nor constitute an investment advice. While making a decision you should consider both your legal and regulatory position in the relevant jurisdiction and the risks associated with the transaction. By making the information and data available on this document INDIA INX is not acting as your legal, financial, tax or accounting advisor or in any other fiduciary capacity with respect to any transaction, of whatsoever nature. Without limitation, this document does not solicit or constitute an offer, an invitation to offer or a recommendation to enter into any transaction. Through this document, INDIA INX is neither soliciting business, generally or specifically, nor is it directing any work flow or recommendations to the Futures Commission Merchants, the Commodity Pool Operator, the Commodity Trading Advisor and Introducing Broker. INDIA INX its group companies and third parties whom any data, logo, etc. belongs in this documents specifically disclaims all liability for any direct, indirect, consequential or any other losses or damages including loss of profits incurred by you or any third party that may arise from any reliance on this document for the reliability, accuracy, completeness. All rights reserved. All content [texts, trademarks, illustrations, images, graphic representations, files, designs, arrangements and the literary work] on this document of INDIA INX, its group companies and/or third party are protected by the prevailing intellectual property laws, therefore the rights accruing from the same wholly vest with INDIA INX. However users are permitted to use the information by making copies, storing (internally) or reproducing the data provided in this document for their OWN PERSONAL USE and not commercial purposes. All other use, other than the above mentioned shall be considered to be in violation of the terms and conditions and would constitute an offence under the laws of India and the International treaties governing the same. Any dispute arising out of or in connection with the use of the information provided by this document is subject to the exclusive jurisdiction if the courts of Ahmedabad (Gujrat), India and shall be governed by the Indian Law. 9