SGX inks OTC clearing deal with KRX

The latter will start clearing OTC derivatives mid-2013.

Singapore Exchange (SGX) and Korea Exchange (KRX) have signed a Memorandum of Understanding (MOU) to jointly explore collaborations in the development of over-the-counter (OTC) financial derivatives clearing capabilities.

SGX, Asia’s first central counterparty for OTC trades, began clearing OTC financial derivatives in November 2010. It has cleared close to US$300 billion notional of OTC financial derivatives including interest rate swaps and non-deliverable Asian foreign exchange forwards. 

Korea Exchange operates a centralised securities and derivatives market where derivatives, stocks, and bonds are traded on a common platform. Its flagship KOSPI200 futures and options have been the most actively-traded derivatives products in the world. As part of KRX’s globalization initiative, the exchange will begin clearing OTC derivatives in the middle of this year.