Singapore Stock Exchange’s TCS Bags contract will run at NSE IFSC
Tata Consultancy Services (TCS), which controls over 40% of capital markets infrastructure solutions, has won a contract from the Singapore Stock Exchange to manage trading and settlement platforms for the upcoming SGX Nifty Exchange at the International Center Gandhinagar Financial Services.
Known as NSE IFSC-SGX Connect, the platform will help members of the Singapore exchange trade Nifty derivatives at the NSE IFSC, which is expected to be operational from mid-year.
The shrewd derivative contracts on the SGX are among the most traded, as they are used by global investors to hedge their exposure to India. SGX Nifty is a joint venture between NSE and the Singapore Stock Exchange.
SGX’s contract is for five years and is a “significantly large order in terms of contract value,” R Vivekanand, global head of BFSI platforms and products at TCS, said Wednesday, without quantifying the contract value.
TCS will provide the core platform for the Gift Data Connect program, he said, adding that the platform will run on its BaNCS Securities Trading solution, on which more than 40% of domestic transactions are currently executed.
The order is also for the provision of maintenance services, covering front office, risk management, back office clearing and settlement modules, he noted.
SGX has formed a special purpose vehicle – SGX India Connect IFSC or SGX ICI – to manage NSE IFSC, which will go a long way in bringing liquidity to the market, Vivekanand said, adding that the exchange will act as an executor-cum – clearing broker member of NSE IFSC for trading and clearing.
While SGX Connect will be run by a special purpose vehicle, traders will continue to trade the same way they used to when the SGX platform was based in Singapore, and the only difference will be that transactions will start and end on TCS. solutions, then switch to Gift City’s exchange solution now, Vivekanand explained.
He said the platform can handle 2 lakh of trades from 12 very large institutional SGX brokers daily. But that doesn’t mean it can’t handle more volume, because the TCS software that NSE runs on handles millions of trade volume, he added.
Vivekanand said that for TCS, BFSI is the largest company and the largest revenue vertical, contributing more than 40% of revenue. In FY21, the BFSI vertical achieved annual revenue of $8.864 billion. Within BFSI, insurance leads with around 40% revenue and margin share, followed by capital markets and banking with 30% each, he said, adding that in the third quarter of FY22, the upper vertical line had fallen by 18%.
Up to 40% of domestic market volume in terms of order management and trading solutions/settlement is conducted on the TCS platform, while globally its software manages up to 32 exchanges, including the London Metals Exchange, Europe Clear, TMX Canada, most MENA markets and South African exchanges, the Singapore and Manila exchanges, among others, make TCS the largest independent provider of trading solutions. market infrastructure in the world.
TCS has been testing and training SGX members since the beginning of this month in Singapore and will begin simulating trades on NSE ISFC post-regulatory approvals in place, which are expected midway through this year.
The project is significant given that the Prime Minister’s Office is monitoring the process of launching the exchange, as its success is key to achieving the government’s goal of creating a larger pool of liquidity in the onshore market. Better liquidity in the NSE IFSC means Nifty contracts are traded onshore and revenues stay in country.
Some of its notable global clients include LCH London, TMX Canada, Nasdaq Dubai, Euroclear, New Zealand Stock Exchange, Strate South Africa, Philippines Depository and Kuwait Clearing Company.
The NSE, BSE, National Securities Depository, MCX, Metropolitan Exchange Central Securities Depository, Clearing Corporation and regulators RBI and Sebi use TCS solutions.