SGX unveils Asian foreign exchange futures

Aims to promote greater transparency.

According to a release, Singapore Exchange is introducing Asian foreign exchange (FX) futures for deliverable and non-deliverable Asian currencies from 11 November 2013. Futures contracts for six currency pairs, AUD/USD, AUD/JPY, USD/SGD, INR/USD, KRW/USD and KRW/JPY, will be launched initially.

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 trading platforms, where appropriate, and cleared through central counterparties.

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 trading of Asian FX futures on SGX offers global investors a transparent, margin-efficient and well-regulated marketplace to seamlessly manage their Asian currency risks. We will be adding more currency pairs to our Asian FX suite over the next 12 to 18 months.

This comprehensive range of Asian FX futures will contribute towards the continued growth of Singapore's FX market, which is already the world's third biggest FX centre,” said Magnus Böcker, CEO of SGX.

SGX is a key risk management centre for customers with exposure to Asian equities risks and the world’s biggest offshore market for Asian equity derivatives. The launch of Asian FX futures on SGX enables customers to manage both currency and equity risks at the same clearing house, thereby maximising operational and capital efficiencies.

“By bringing Asian foreign exchange trading onto the exchange, SGX helps customers in their currency risk management activities and to minimise counterparty risks. We are delighted to be supporting the launch of Asian FX futures in Singapore as a market-maker for the USD/SGD currency pair,” said Andrew Ng, Group Executive (Treasury and Markets), DBS Bank.