India’s premier bourse BSE, which was the first exchange to enter the just-launched International Financial Services Centre (IFSC) in Ahmedabad, has said it hopes to commission its exchange there within 12-18 months.
The BSE Brokers Forum had picked a 3 lakh sq ft space at the country’s first IFSC at the GIFT City in January this year for about Rs 150 crore, which now they have increase to 5 lakh sq ft. “It will take about 12-18 months to operationalise the exchange at the IFSC, provided all the contentious issues regarding taxation, dispute resolution mechanism and IPR regime are resolved,” BSE managing director and chief executive Ashish Kumar Chouhan told PTI.
He also said that the BSE’s investment through its brokers forum will be much higher than the initial Rs 150 crore as it has decided to nearly double the space to 5 lakh sq ft. But he did not disclose the additional outgo.
On the key issues that need to be resolved at the IFSC, which was formally launched by Finance Minister Arun Jaitley last Friday, he said there are three main issues that need urgent attention of the government and the regulators — taxation as well as setting up a dispute resolution mechanism and a strong IPR regime.
He also welcomed the stringent RBI guidelines issued on first of this month, wherein the monetary authority has said no cash transaction or account opening/cheque book facilities will allowed by banks at the centre. “It is better that we plug all the loopholes well in time so that money laundering issues wont crop up there and scuttle the future of the centre,” Chouhan said. The BSE, which is Asia’s oldest stock exchange, was one of the first to announce establishing the country’s first International Exchange at the IFSC on January 12.
The NSE followed. Currently, the BSE Brokers’ Forum has 742 trading members in the equity segment and 93 trading members (associates) of the commodity segment as its members. The BSE Brokers hold around 40 percent stake in the BSE.
Leading banks like State Bank, Bank of Baroda, Bank of India, Syndicate Bank, Corporation Bank, HDFC Bank among others have also already been allotted space in IFSC. Chouhan said that much like Hong Kong’s achievements over the past 35 years, since it set up its IFSC in 1978, with regard to mobilising resources for economic development in China, the IFSC at Gift City also has a potential to play a similar role for India.
The government aims at creating a vibrant IFSC on the lines of those in Dubai, Singapore and Hong Kong which can help check the flight of trading in rupee and securities to such offshore financial hubs.