SGX Invests $250 Million to Offer Fastest Access to Asia
Singapore Exchange (SGX) announced June 3 a $250 million plan to strengthen Singapore’s position as the best market for accessing Asia. This new initiative – Reach – will create the world’s fastest trading engine with the lowest trading latency, establish a world-class data centre for SGX and seamlessly connect trading communities in global financial hubs to Singapore. Reach will be rolled out from the first quarter of 2011.
The resulting trading environment will be ideal for global investors, including sophisticated traders and participants new to the region. It will bring better liquidity and greater velocity to the market, enhancing SGX’s position as the Asian Gateway.
SGX’s new trading engine – SGX Reach – is delivered through NASDAQ OMX’s Genium INET platform, Voltaire’s InfiniBand solution and HP’s technology. On 7 May 2010, SGX conducted a benchmark test with its partners at HP’s Singapore Capacity Planning Centre and established an average order response time of 90 micro-seconds “door-todoor”. This will provide customers with the fastest execution capability currently in the world.
The new SGX data centre – a purpose-built state-of-the-art facility at Keppel Digihub – will house SGX’s trading, market data and clearing infrastructure and offer a wide range of co-location facilities, introducing ultra-low latency trading and market data.
The Reach initiative also includes establishing a presence at key data centres in Chicago, London, New York and Tokyo. These SGX hubs will radically lower crossborder connectivity costs to SGX and facilitate participation in Asia’s growing markets by a larger number of global trading firms.
Mr. Magnus Bocker, CEO of SGX said, “We are the leader among exchanges in satisfying global appetite for Asian investment products. With Reach, Singapore will become even more accessible to greater numbers of investors including international traders seeking the next generation of growth opportunities. The investment also reaffirms SGX’s commitment to provide global reach for Asian issuers.”
Mr. Gan Seow Ann, Head of Markets at SGX added, “Customers which co-locate their trading applications with SGX’s trading engines will be able to capitalise on new trading opportunities. We are delighted that 40% of our broking members have already signed up as the first batch of subscribers. In addition, SGX hubs will provide low-cost access to key global trading community locations beginning with Chicago, London, New York and Tokyo.”
Singapore Exchange Limited (“SGX”) wishes to announce an investment of $250 million in
technology, comprising $70 million for a new securities trading engine and $180 million for
infrastructure outsourcing services and data centres, collectively known as the Reach initiative. The investment of $70 million was previously announced by SGX on 4 March 2010. The investment in the Reach initiative is to create the fastest access to Asia by implementing a new high-performance trading engine, a state-of-the-art data centre, as well as introducing co-location services to its customers. The Reach initiative also includes establishing presence at key data centres in Chicago, London, New York and Tokyo. The infrastructure outsourcing services will enable SGX to benefit from improved access to technical capabilities, implementation of enhanced processes and comprehensive infrastructure management tools. Please refer to the news release dated 3 June 2010 for further details on the technology investment.
Arising from the Reach initiative, SGX expects that the incremental annual expenses of
approximately $12 million for the next five years, to be more than offset by the potential
revenues from the co-location services.