The Singapore Exchange (SGX) will discontinue trading in single-stock futures linked to Indian equities from October, ending an offshore derivatives route that has allowed international investors to gain exposure to individual Indian stocks. The move marks a significant change in the way overseas investors access Indian equity derivatives outside the country’s domestic exchanges.
The decision could push some of the trading activity toward India’s GIFT City, where foreign investors can access Indian-linked derivatives through the international financial-services framework. It also comes after Indian regulators reportedly raised concerns about the use of prices from Indian exchanges as references for derivatives traded on SGX. The Securities and Exchange Board of India (Sebi) and SGX did not respond to The Economic Times’ queries about the decision.
What Happened
SGX is set to stop offering single-stock futures connected to Indian equities from October. The exchange currently offers futures linked to 49 Indian stocks, providing overseas investors with a way to take positions in individual Indian companies without directly trading those futures contracts on Indian exchanges.
The precise reason for the discontinuation has not been officially disclosed. However, people familiar with the matter told The Economic Times that Indian authorities had questioned the use of stock prices from Indian exchanges for derivative contracts traded on SGX.
The development follows a broader effort by Indian regulators and market institutions to bring offshore trading in Indian-linked derivatives closer to domestic financial centres.
Key Details
| Category | Details |
|---|---|
| Exchange | Singapore Exchange (SGX) |
| Products affected | India-linked single-stock futures |
| Number of Indian-linked contracts | 49 stocks |
| Discontinuation | From October 2026 |
| Potential alternative | GIFT City / NSE International Exchange |
| Regulatory issue | Use of Indian stock prices for offshore derivatives |
| Earlier major change | SGX Nifty replaced by GIFT Nifty in 2023 |
| Regulators mentioned | Sebi and Indian market authorities |
What Are Single-Stock Futures?
Single-stock futures are derivative contracts whose value is linked to the future price of an individual company’s shares.
Unlike buying the underlying stock, investors can use futures to take leveraged positions on whether a share price will rise or fall. They can also be used by institutional investors to hedge existing equity exposure.
SGX’s India-linked contracts have therefore provided international investors with an offshore mechanism for gaining exposure to individual Indian companies.
The upcoming discontinuation does not mean investors will lose the ability to trade Indian stocks or derivatives altogether. Instead, they may need to use alternative routes depending on their regulatory status and the structure eventually available to them.
Why SGX Is Dropping the Contracts
The immediate trigger remains unclear because neither SGX nor Sebi has publicly explained the decision in detail.
According to people cited by The Economic Times, Sebi had expressed reservations about the trading of Indian equity-linked single-stock futures on SGX. The issue reportedly concerned the use of prices from Indian exchanges as the underlying reference for contracts traded offshore. Discussions had been underway for several months.
There may also be a broader legal and regulatory question around the use of a foreign exchange platform to offer derivatives based on securities listed in another jurisdiction.
For India, the issue is linked to a longer-running policy objective: encouraging trading activity connected to Indian assets to take place through domestic or India-controlled financial infrastructure.
From SGX Nifty to GIFT Nifty
The latest development has parallels with the earlier transition from SGX Nifty to GIFT Nifty.
Until 2023, SGX Nifty allowed international investors to trade futures linked to India’s Nifty 50 index. The contract became increasingly popular as a way for global investors to gain exposure to Indian market movements before domestic trading began.
As volumes grew, Indian authorities sought to bring more of that activity to India’s International Financial Services Centre in GIFT City.
The SGX Nifty contract was subsequently discontinued and replaced by GIFT Nifty through a revenue-sharing arrangement between SGX and NSE International Exchange.
The single-stock futures transition could follow a similar broad direction, although the final structure may be different.
GIFT City Could Benefit
One potential beneficiary is GIFT City, India’s international financial hub in Gujarat.
Foreign investors can already trade derivatives through the international exchange infrastructure based there. If trading in India-linked single-stock futures moves from Singapore to GIFT City, the shift could increase volumes and deepen the financial ecosystem around India’s international financial centre.
Rajesh Gandhi, a partner at Deloitte India, told The Economic Times that foreign investors currently using SGX could have to reassess how they access Indian stock futures depending on the framework ultimately agreed. Potential routes could include obtaining a foreign portfolio investor licence to trade on Indian exchanges or using the eligible foreign investor route at GIFT City.
Potential Routes for Foreign Investors
| Route | Broad Mechanism |
|---|---|
| NSE/BSE | Foreign investors operate through applicable FPI structures |
| GIFT City | Eligible foreign investors trade through the international exchange |
| SGX | India-linked single-stock futures to be discontinued |
| Existing Indian equities | Foreign investors can continue accessing Indian stocks subject to applicable rules |
The exact implications will depend on the final regulatory and market-access arrangements.
How Large Is the India Single-Stock Futures Market at SGX?
The India-linked single-stock futures market at SGX has been considerably smaller than the former SGX Nifty business.
The Economic Times reported that trading volumes across the 49 India-linked single-stock futures had not increased in the same way SGX Nifty volumes had. That difference could limit the immediate impact of the discontinuation.
SGX’s own historical statistics show that India single-stock futures still recorded substantial activity. In October 2025, the exchange reported 142,473 contracts traded in India single-stock futures, while the year-to-date volume stood at more than 1.64 million contracts.
However, contract volume alone does not establish how much capital or economic activity would migrate to India if the products disappear from SGX.
Impact on Foreign Investors
The biggest immediate effect will be operational.
Investors that currently use SGX-listed futures to hedge or gain exposure to Indian companies will need to determine which alternative products and access mechanisms meet their investment requirements.
The transition could involve changes in documentation, clearing arrangements, trading hours, currency exposure, taxation and settlement procedures.
GIFT City could become an attractive alternative because foreign investors can access international-market products there without necessarily using the same domestic-market structure as investors trading on NSE or BSE.
However, the availability of equivalent single-stock contracts and sufficient liquidity will be critical.
GIFT Nifty Provides a Precedent
GIFT Nifty offers an example of how offshore India-linked trading can be relocated.
The contract is denominated and settled in US dollars, making it suitable for international investors seeking exposure to Indian market movements without taking direct rupee exposure through the domestic market.
If single-stock futures migrate to GIFT City, similar advantages could make the international financial centre more relevant to global investors.
The key question will be whether sufficient liquidity develops. A derivatives market becomes more useful when it has tight spreads, substantial participation and reliable price discovery.
What About Indian Investors?
The shift is primarily relevant to foreign investors because the affected products are traded offshore.
Indian residents face separate restrictions around GIFT Nifty and derivatives under India’s foreign-exchange regulations and the Reserve Bank of India’s Liberalised Remittance Scheme. The Economic Times noted that Indian residents cannot use the LRS route to trade GIFT Nifty and its derivatives.
Consequently, the discontinuation of SGX’s India-linked single-stock futures should not be interpreted as a new trading opportunity for ordinary Indian retail investors.
Domestic investors will continue to access India’s listed stock derivatives through the regulated domestic exchanges, subject to applicable rules.
Regulatory Significance
The move highlights the increasing importance of regulatory control over offshore derivatives linked to domestic securities.
India has been attempting to build GIFT City into a competitive international financial centre while encouraging more trading, investment and financial services activity to take place within its jurisdiction.
Bringing offshore India-linked derivatives into an India-based international financial centre could strengthen domestic market infrastructure and potentially increase the financial sector’s contribution to GIFT City’s growth.
At the same time, regulators must balance this objective with the need to maintain attractive market access for international investors.
Challenges Ahead
The biggest challenge will be ensuring that investors have a practical alternative once SGX contracts disappear.
If equivalent products at GIFT City lack liquidity or are more expensive to trade, some investors could choose other instruments or reduce their exposure rather than migrate immediately.
Another consideration is the legal framework governing stock-linked derivatives. The regulatory concerns that reportedly contributed to SGX’s decision will need to be resolved clearly if similar products are introduced through another offshore or international-market structure.
Market participants will therefore be watching for further announcements from SGX, Sebi, NSE International Exchange and other relevant authorities.
Industry Impact
The move could strengthen India’s position as a destination for international trading in Indian assets.
GIFT City has already benefited from the migration of the SGX Nifty ecosystem, and a similar shift in single-stock futures could further expand its derivatives market.
For SGX, the decision removes a category of products linked to one of Asia’s largest equity markets. However, the relatively smaller scale of India’s single-stock futures compared with the former SGX Nifty business means the commercial impact may be more limited.
For international investors, the change reinforces the need to reassess how offshore access to Indian equities is structured.
Looking Ahead
SGX’s decision to discontinue India-linked single-stock futures represents another stage in India’s effort to bring offshore trading in Indian securities closer to its own financial infrastructure. While the contracts are not as significant in scale as the former SGX Nifty, their removal could still affect foreign investors that use them for trading and hedging. GIFT City is the most obvious potential beneficiary, but the success of any migration will depend on the availability of comparable contracts, competitive pricing and sufficient liquidity.
The next developments will likely centre on the regulatory framework and whether an India-linked single-stock futures market emerges at GIFT City. Investors and financial institutions will watch for announcements from Sebi, SGX and NSE International Exchange, as well as changes in trading volumes after the Singapore contracts cease. If activity migrates successfully, the move could strengthen GIFT City’s role as India’s international derivatives hub; if liquidity remains limited, some offshore investors may seek alternative ways to manage exposure to Indian equities.
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