Inter-dealer broker ICAP and the Singapore Exchange (SGX) have announced a strategic partnership including various initiatives mainly related to the evolution of the foreign exchange market in Asia.
ICAP’s electronic foreign exchange EBS platform and SGX will be collaborating in the development of new products for the Asian currency market and complement the FX over-the-counter (OTC) and futures markets in the region.
Initially, EBS and SGX will offer their customers access to SGX listed currency derivatives via the EBS platforms, to be cleared by SGX. Execution and clearing of a select number of SGX Asian FX Futures contracts will be available in specific large sizes called Negotiated Large Trades (NLTs).
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The initiative is subject to regulatory approvals, as the Monetary Authority of Singapore leverages its strong regulatory framework. The companies are planning to implement the initiative in the third quarter of 2015.
EBS is also exploring the opportunity to establish an additional matching engine in Singapore, to be co-located in an SGX hosted facility.
Since launching its foreign exchange products, SGX has introduced a total of eleven FX Futures contracts, including the popular SGX Indian Rupee (INR/USD) futures in November 2013 and the SGX Chinese Renminbi (USD/CNH and CNY/USD) futures which were added more recently in October last year.
More than US$26 billion in aggregate notional value has been traded on the SGX since launch. The exchange is also the first central counterparty in this region to clear OTC non-deliverable (ND) FX forwards in seven Asian currencies and interest rate swaps.