SGX Introduces RMB FX Futures
Singapore Exchange (SGX) will introduce a new set of Asian currency futures to expand its current suite of foreign exchange (FX) futures in the third quarter of 2014, subject to regulatory approval. The new Asian FX suite includes currency futures contracts on Chinese renminbi (RMB), Japanese yen and Thai baht follows closely after the initial launch of six FX futures contracts in November 2013, which have seen over US$1 billion in notional value traded in the four months since it began trading.
SGX’s introduction of Asian FX futures is in line with global G20 regulatory reforms where all standardised OTC derivative contracts should be traded on exchanges or electronic platforms, where appropriate, and cleared through central counterparts. The trading of FX derivatives on a regulated exchange platform will promote greater transparency, and better serve investment and risk management needs in the Asian time zone.
“The strong take-up of our FX futures deepens SGX’s unique Asian offering to global investors. We work closely with the market and address their needs by providing a transparent, margin-efficient and well-regulated marketplace to manage their Asian currency risk. The introduction of varying RMB products will facilitate greater use of RMB in international trade and investment. This will also contribute towards the development and growth of Singapore as a leading offshore RMB centre,” said Magnus Böcker, CEO of SGX.
As part of its commitment in upholding a thriving and transparency marketplace, SGX has been recognised as an early adopter of the highest international standards for payment, clearing and settlement developed by the International Organisation of Securities Commissions (IOSCO) and the Committee on Payment and Settlement Systems (CPSS). In November 2013, SGX Derivatives Clearing was endorsed by the International Monetary Fund’s Financial Sector Assessment Programme for satisfying high levels of compliance with the Principles for Financial Market Infrastructures (PFMI). More recently, SGX Derivatives Clearing has become the first Asian clearing house authorised as a Derivatives Clearing Organization (DCO) by US derivatives regulator, the Commodity Futures Trading Commission (CFTC).
The international acknowledgements underscore SGX as a leading exchange with the highest international standards and practices which clients can rely on for their business and risk management needs.
Singapore is today the world’s third largest FX market and the primary price discovery centre for Asian FX trading. In addition to Asian FX futures, SGX is the first central counterparty in Asia to clear over-the-counter non-deliverable FX forwards in seven Asian currencies, and interest rate swaps.