Refinitiv Launches NDF Matching in Singapore
Posted by Colin Lambert. Last updated: May 5, 2022
Months of rumours of Refinitiv becoming the first of the primary FX venues to locate in SG1 have been answered with news the firm is locating a new NDF matching venue in the city state. Singapore has been on an aggressive growth strategy seeking to become the primary e-FX location in Asia and has seen multiple major players locate in SG1.
NDF Matching, a new fully cleared non-deliverable forwards venue in Singapore, is supported by the Monetary Authority of Singapore (MAS). The impact of the move will be interesting given the imminent re-platforming of EBS, which remains the dominant NDF platform amongst the multi-dealers, however EBS does not have a Singapore presence at this time and NDF matching is planned to be located in London after the migration to CME Globex later this month.
This represents the first phase of LSEG’s plans to implement NDF and spot Matching as well as streaming relationship venues in Asia to meet both the growing demand in the region and increasing electronification of FX trading globally. The integration of clearing into the design of NDF Matching also enables easier access to the full book of liquidity in the venue for all participants, it adds, revealing the venue will be open for integration testing later this year, with a full production launch in mid-2023.
The launch of NDF Matching is also the first stage of LSEG re-platforming its FX venues to its core technology, which is scheduled for 2023.
“LSEG’s decision to launch cleared NDF Matching in Singapore underscores Singapore’s position as a price discovery hub,” says Lim Cheng Khai, executive director of the Financial Markets Development Department, MAS. “As a leading inter-dealer platform, LSEG’s venue is a key addition to our FX ecosystem and will play an important role in meeting Asian market players’ growing FX needs.”
Neill Penney, group head of FX, LSEG, adds, “There has been strong demand for LSEG to enter the NDF CLOB market as participants look for greater choice in where they execute. Singapore boasts a leading position as an FX hub and we are grateful for the support from MAS as we launch this new initiative. This is the first FX venue to be delivered on LSEG’s leading-edge technology. We look forward to bringing the benefits of this improved technology to our market-leading spot Matching and FXall venues in future phases of our re-platforming.”
As part of the roll out, LSEG’s ForexClear service is part of the strategy, James Pearson, head of ForexClear, LCH, says, “ForexClear, and its divisional partners within LSEG, are excited to collaborate with the MAS to launch NDF Matching in Singapore. It exemplifies not only the focus on Asia for LCH, and across LSEG, but also the innovation possible within LSEG to create a trading platform wherein a broader array of market participants can decide on a pre-trade basis to clear their NDFs. Margin savings (driven by UMR), operational efficiencies, and credit intermediation advantages will be a fundamental feature of this industry-first platform, all of which have underpinned the recent rapid growth of ForexClear and NDF clearing. In Q1 2022, ForexClear cleared on average $100 billion of NDFs daily, and we look forward to providing the compelling benefits of FX clearing to more participants as this market continues to grow.”