Hugh Whelan, President of ACI UK and Head of Liquidity Management & Data at SGX, highlighted the growing importance of liquidity management, digital innovation, and market structure evolution during the Finance Magnates London Summit 2024 (FMLS:24).

Speaking in an interview with Jonathan Fine, Whelan shared insights on the association’s expanding focus beyond foreign exchange and its broader role in fostering education and governance within financial markets.

ACI Expand Focus Beyond FX

“The ACI is transitioning from being primarily FX-focused to covering payments, digital assets, and derivatives,” Whelan said. He underscored the need for a broader approach, given the interconnected nature of modern financial services.

“Payments are now a significant area of focus, and innovation in this space is critical, especially for non-financial institutions without access to large settlement systems like CLS,” he added.

ACI UK has also invited new executive members, including figures like Pritesh Sukhdev, to represent diverse sectors such as commodities, prime brokerage, and hybrid retail-institutional models. Whelan noted that this diversification aligns with the association’s global education initiatives, which include certifications accredited for their governance and principle-based training.

SGX and the Future of Liquidity

In his role at SGX, Whelan elaborated on the Singapore Stock Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term's strategy to position itself as a comprehensive FX provider. SGX’s acquisitions of BidFX and Max Trader have bolstered its capabilities, enabling it to offer end-to-end solutions for medium to small financial institutions and macro hedge funds.

“The goal is to integrate listed and OTC products, providing tools for price aggregation, white-label services, and macro hedging,” Whelan explained.

The conversation touched on the liquidity challenges highlighted during the summit's “Swimming Naked” panel, referencing Warren Buffett’s famous quote about market exposure. Whelan emphasized the industry's progress in understanding liquidity quality.

“It’s not just about price but about behavior and execution standards,” he said. “Maintaining relationships with fewer liquidity providers often yields better outcomes.”

Data and Market Oversight

Whelan also addressed the increasing role of data analytics in managing liquidity. “Today, the challenge isn’t access to data but making sense of it,” he remarked. Aggregating and normalizing data to facilitate meaningful conversations is a priority for SGX.

He also discussed identifying rogue activity and recycled liquidity within trading systems. “When someone misuses liquidity, it’s visible at scale, and venues like SGX must address these behaviors to maintain market integrity,” Whelan said.

The industry has developed sophisticated methods for detecting and managing toxic trading behavior. When improper trading practices occur at the retail level, their impact can be traced through the market structure, appearing as “recycled liquidity.” Venues with significant market participation can identify and address such behavior promptly.

Advocating for Broader Adoption

The interview concluded with reflections on the adoption of the FX Global Code, a set of best practices for market participants. While Whelan acknowledged widespread adoption among sell-side Sell-Side Those in the financial industry involved with the production, marketing, and the sale of bonds, forex, stocks, and other financial instruments constitute the sell-side.Products and services produced by the sell-side are geared towards those who on the buy-side. You can think of the sell-side and buy-side like a coin, you cannot have one side without the other. The sell-side is comprised of individuals, firms, fintech companies, and market makers, who are responsible for providing liquidity in th Those in the financial industry involved with the production, marketing, and the sale of bonds, forex, stocks, and other financial instruments constitute the sell-side.Products and services produced by the sell-side are geared towards those who on the buy-side. You can think of the sell-side and buy-side like a coin, you cannot have one side without the other. The sell-side is comprised of individuals, firms, fintech companies, and market makers, who are responsible for providing liquidity in th Read this Term institutions, he pointed to gaps in buy-side engagement.

“Bringing in asset managers, hedge funds, and systematic traders remains a challenge,” he admitted. However, he expressed optimism about ongoing efforts to involve these groups more actively.

The industry is actively working to engage asset managers, hedge funds, and systematic traders in the consultation process.