Singapore Exchange

The Singapore Exchange (SGX) is a Singapore-based exchange group that operates securities and derivatives markets. It provides services including listing, trading, clearing, settlement, securities depository, market data and index administration. Headquartered in Singapore, SGX connects domestic and international investors with financial markets across Asia and other regions.

Singapore Exchange Limited was incorporated on 21 August 1999 through the merger of the Stock Exchange of Singapore and the Singapore International Monetary Exchange. Its shares were listed on its own Mainboard on 23 November 2000.

SGX operates as a multi-asset market infrastructure provider, offering products and services across equities, fixed income, exchange-traded funds, real estate investment trusts, derivatives, foreign exchange and commodities.

History

Formation

Singapore Exchange was formed in 1999 through the merger of the Stock Exchange of Singapore and the Singapore International Monetary Exchange. The merger brought securities and derivatives trading under a common corporate structure and established an integrated exchange group.

The exchange began operating as a listed company in 2000, becoming one of the major financial-market institutions in Singapore.

Expansion of market services

Following its establishment, SGX expanded its product range and market infrastructure to serve domestic and international participants. Its activities developed across securities trading, derivatives, clearing, settlement, custody and market information.

The exchange also developed products linked to major Asian equity indices, commodities, currencies and interest rates. These products enabled investors and financial institutions to manage exposure to regional markets through Singapore-based trading infrastructure.

International development

SGX expanded its international presence through partnerships, overseas offices, new financial products and services designed for cross-border investment.

Its derivatives markets became particularly associated with contracts linked to major Asian equity indices, including benchmarks for China, India, Japan and Southeast Asia.

Market structure

SGX operates an integrated market infrastructure serving issuers, investors, brokers, clearing members and other financial institutions.

Its principal business areas include:

Securities market: Trading in listed shares, exchange-traded funds, real estate investment trusts and other securities.
Derivatives market: Futures and options linked to equity indices, currencies, interest rates and commodities.
Fixed-income market: Listing and trading-related services for bonds and other debt instruments.
Clearing and settlement: Infrastructure for managing obligations arising from securities and derivatives transactions.
Depository services: Securities custody and related services through the group's depository infrastructure.
Market data and indices: Market information, benchmarks and index-related services.

A simplified market process is:

$L i s t i n g \to T r a d i n g \to C l e a r i n g \to S e t t l e m e n t$

Securities market

The SGX securities market provides a venue for companies to list shares and raise capital from investors. Listed products include ordinary shares, real estate investment trusts, business trusts, exchange-traded funds, exchange-traded notes, structured warrants and other permitted securities.

The exchange operates different listing boards and product arrangements to accommodate companies with different characteristics and financing requirements.

Mainboard

The Mainboard is the principal listing board of SGX. It accommodates companies that meet the applicable listing requirements and is used by established businesses seeking access to public equity markets.

Catalist

Catalist is a listing platform intended for growth-oriented companies. It operates under a sponsor-supervised framework, in which approved sponsors play an important role in assessing applicants and supporting ongoing compliance.

Derivatives market

The SGX derivatives market provides futures and options contracts used for hedging, investment, arbitrage and price discovery.

Products cover several asset classes, including:

equity indices;
foreign exchange;
interest rates;
commodities; and
other financial instruments.

SGX has developed an international derivatives business around contracts linked to Asian markets. These products allow market participants to obtain exposure to regional indices and manage financial risks without necessarily buying the underlying securities.

A simplified derivatives relationship is:

$U n d e r l y i n g A s s e t \to D e r i v a t i v e C o n t r a c t \to R i s k M a n a g e m e n t$

Equity index derivatives

Equity index futures and options are an important part of SGX's international derivatives business. The exchange lists contracts linked to benchmarks in several Asian markets, including China, Japan, Taiwan and India.

Historically, SGX was known for its SGX Nifty futures, which provided international investors with exposure to the NIFTY 50 index outside India's domestic market hours.

In July 2023, trading in Nifty-linked offshore derivatives transitioned from SGX to the NSE International Exchange (NSE IX) in Gujarat International Finance Tec-City. The resulting product, GIFT Nifty, continued to provide an international trading venue for Nifty-linked derivatives.

The transition formed part of a collaboration between SGX and the National Stock Exchange of India to relocate the relevant trading and clearing arrangements to GIFT City.

Fixed-income market

SGX provides listing and related services for debt securities issued by corporations, financial institutions and other eligible entities.

Its fixed-income activities include support for international bond issuers and access to investors seeking debt instruments across currencies and credit categories.

The exchange's international reach enables issuers from outside Singapore to access its listing infrastructure, while investors can use the market to identify and assess debt securities.

Clearing and settlement

Clearing and settlement are core functions of SGX's market infrastructure.

Clearing involves determining the obligations arising from transactions and managing counterparty risk under the relevant rules. Settlement involves completing the transfer of securities, cash or other contractual obligations.

SGX operates clearing infrastructure for securities and derivatives markets. Its derivatives clearing arrangements include margin requirements and risk-management procedures intended to manage the possibility that clearing participants fail to meet their obligations.

A simplified clearing process is:

$T r a d e \to C l e a r i n g \to R i s k M a n a g e m e n t \to S e t t l e m e n t$

Market indices

SGX supports and distributes market indices used to track securities and assess market performance. The principal benchmark for Singapore's domestic equity market is the Straits Times Index (STI).

The STI is a market-capitalization-weighted index that tracks the performance of 30 leading companies listed on SGX.

The exchange also offers access to indices and index-related products covering other Asian markets and asset classes.

International role

SGX serves as an international market infrastructure provider connecting investors with Asian and global financial markets. Its international activities include equity listings, bond listings, derivatives, foreign exchange, commodities and index-related services.

The exchange's derivatives markets provide trading and hedging opportunities linked to major Asian equity benchmarks. Its fixed-income and securities businesses also support issuers and investors operating across national borders.

A simplified representation is:

$I n t e r n a t i o n a l I s s u e r s + G l o b a l I n v e s t o r s \to S G X M a r k e t I n f r a s t r u c t u r e$

Regulation

Singapore Exchange operates within Singapore's financial regulatory framework. The Monetary Authority of Singapore (MAS) regulates market operators and relevant financial activities under applicable legislation, including the Securities and Futures Act.

SGX's exchange and clearing entities are subject to regulatory requirements concerning market integrity, clearing and settlement, risk management, disclosure and investor protection.

The regulatory framework also establishes obligations for market participants, including brokers and other financial institutions conducting regulated activities.

Economic significance

Singapore Exchange is an important component of Singapore's financial services sector. It provides infrastructure for companies seeking capital, investors trading securities, and institutions managing financial risks through derivatives.

Its international orientation supports Singapore's role as a regional financial centre and connects market participants with securities and derivatives linked to Asian and global assets.

The exchange's significance extends beyond domestic equities through its international derivatives, fixed-income, foreign-exchange and commodity-related businesses.

External links