LMAX Launches NDF Trading

Following receipt of its Recognised Market Operator licence from the Monetary Authority of Singapore, LMAX Group has formally launched FX NDF trading in two matching centres, Singapore’s SG1 and London’s LD4.

First announced in 2022, the NDFs will be traded on a central limit order book (CLOB), and will initially target Asia Pacific, the largest region for NDF trading globally, with three of the four largest pairs by volume coming from this region. LMAX says the launch supports growing regional demand for NDF trading and access to deeper institutional liquidity as well as enhanced FX market structure.

LMAX says Asia Pacific is a “strategically important region” and the business views Singapore as paramount to its growth, as the country emerges as one of the leading FX hubs, globally. Turnover in the centre has doubled in the last eight years to more than $850 billion per day, according to FX committee data. Overall, trading in NDFs almost doubled globally between 2016 and 2022 from $134 billion to $266 billion, owing to greater electronification of NDF markets and increasing numbers of market participants.

“As demand for institutional liquidity for Asian currencies continues to grow, adding NDFs to our global FX offering is a logical next step following the launch of our matching engine in SG1 in 2022,” says David Mercer, CEO of LMAX Group. “We recognise the significant potential that remains untapped in the Asian FX market and will continue to broaden our product suite, expand our distribution capabilities globally, and build the leading institutional FX marketplace.”

FX NDF trading on LMAX Exchange via Singapore and London will initially offer top Asian USD crosses including Indian rupee (INR), South Korean won (KRW), New Taiwan dollar (TWD), Chinese yuan (CNY), Indonesian rupiah (IDR), Philippine peso (PHP) and Malaysian ringgit (MYR). The firm says Latin American crosses will follow.

“The launch of NDF trading by LMAX Exchange is a significant step forward in the growing importance of Singapore as a hub for FX price discovery,” says Paul Buttenmueller, global head of e-FX Trading at UBS. “This will improve market access to local pricing for Asian emerging market currencies, building liquidity and supporting volume growth of NDFs.”

Dmitry Ilyaev, head of e-FX, Capital Markets, at Commerzbank, adds, “We welcome this expansion to the FX offering from LMAX Group in the region and look forward to strengthening our position and supporting local volume growth in the NDF market. We’re pleased to see one of our partners displaying such commitment to institutions and clients throughout Asia Pacific.”