LMAX Group Deploys in SG1: To Add NDFs
Posted by Colin Lambert. Last updated: November 19, 2022
LMAX Group has expanded its global infrastructure with the launch of a matching engine in Singapore’s SG1 data centre and unveiled plans to roll out NDF trading in 2023.
Equinix’ SG1, which went live as part of the city state’s efforts to build its profile to be the biggest e-FX centre in Asia-Pacific, is the site of LMAX’s fourth matching engine, alongside London, New York and Tokyo. The firms says the new location will bring greater access for clients to regional institutional liquidity and the ability to trade on a central limit order book (CLOB) with streaming real-time, firm limit order liquidity. It adds the launch is its latest investment in robust and scalable exchange infrastructure to ensure efficient price discovery and consistent, low latency execution for its global customers.
LMAX adds that it is committed to building a more diversified pool of liquidity in Asia Pacific and sees potential to enhance market access by establishing an Asia Pacific corridor between SG1 and TY3 in Tokyo.
Although it is starting with spot trading, LMAX also reveals it intends to bring its global trading capabilities to the region through an expanded range of products. To this end it intends to obtain a Recognised Market Operator (RMO) licence from the Monetary Authority of Singapore to enable it to offer trading of non-deliverable forwards (NDFs) in early 2023.
“Singapore is the largest FX trading centre in Asia Pacific and a major FX centre globally,” says David Mercer, CEO of LMAX Group. “We recognise the strong demand for deep institutional liquidity and transparent, efficient price discovery that the CLOB execution model delivers to market participants in the region. Furthermore, we have seen considerable growth in trading volumes in our TY3-based exchange, with increasing participation from both global and local financial institutions. Over time, we aim to establish a unique multi-asset liquidity offering for the region, combining our capabilities, distribution and infrastructure across both Japan and Singapore to benefit our global customer base.”
Lim Cheng Khai, executive director, Financial Markets Development Department, MAS, adds, “We welcome the launch of LMAX Group’s matching engine in SG1 to deepen the liquidity of the FX market in Singapore and support the needs of market participants in the region. Singapore has cemented our position as the third largest global FX centre, and LMAX Group will be a significant addition to the attractiveness and vibrancy of our FX ecosystem.”
In the most recent Disruptor video series recording with The Full FX, Mercer discusses increased activity in Asia Pacific, a point reinforced by Quentin Miller, managing director, Asia Pacific, at LMAX Group, who says, “Our Singapore matching engine brings us closer to clients in the region and since launch we have seen 3x growth in our FX trading volumes month on month. We are excited by the opportunities that lie ahead and are focused on building our presence in APAC, delivering a competitive range of products and services to meet the increasing needs of institutions locally.”
Subject to MAS approval, LMAX also intends to extend its retail brokerage and crypto platform, LMAX Digital, to the region from Singapore.