Volumes are down 25 per cent since February, when Indian exchanges announced they were ending commercial licensing to overseas exchanges to curb offshore trading of domestic products.
A total of 2.2 million SGX Nifty futures contracts were traded in February. Not just Nifty contracts but the total derivatives volume on SGX was 12 per cent lower in April, compared to the previous month.
The Nifty index contributes nearly 10 per cent to SGX's equity derivatives revenue. SGX's licensing arrangement with the National Stock Exchange (NSE) to trade Nifty contracts ends in August. To protect revenues, SGX has announced launch of Indian derivative products. From June, the exchange will move all the outstanding client positions on Nifty to the new SGX India derivatives.
It remains to be seen whether investor interest in the new products is similar to that enjoyed by Nifty products, which were being used by overseas investors hedge their underlying exposure to the Indian market. The new products are identical to the Nifty, however, SGX is yet to provide clarity on the methodology used for arriving at the reference value.
 "The NSE is planning to replicate what is happening in China where several companies, which earlier eyed overseas listing, are now looking at the mainland.")