SGX Launches FX ECN
Posted by Colin Lambert. Last updated: September 22, 2022
Singapore Exchange (SGX) has officially launched SGX CurrencyNode, an FX ECN. The launch comes as the exchange was granted its Recognised Market Operator licence from the Monetary Authority of Singapore.
Hosted in SG1, the SGX says the ECN offers global banks, non-bank liquidity providers, brokers and institutional investors access to multiple sources of OTC FX liquidity anonymously through a single venue. Using a central prime brokerage model, with BNP Paribas and Deutsche Bank as the PBs, SGX CurrencyNode currently streams liquidity for FX spot, precious metals and NDFs, with plans to launch FX swaps and NDF spreads at a later date.
SGX says the new solution builds on the strengths of BidFX and MaxxTrader, the later of which it bought last year, by combining OTC buyside and sell-side solutions. With the launch, SGX says its FX business now offers complete OTC FX technology solutions that cater to the electronification and automation needs of market participants, while connecting FX market liquidity providers to SGX FX’s OTC and futures marketplace.
“This launch is an important step in enhancing the price discovery, efficiency and liquidity for Asian currencies,” says Lee Beng Hong, head of fixed income, currencies and commodities at SGX Group. “Our goal is to create a best-in-class FX marketplace that elevates market participants’ access to both OTC and listed futures, aggregating market liquidity and serving all their FX hedging and trading needs with strong efficiency and liquidity. Our FX offering is now complete with the launch of SGX CurrencyNode, and we thank MAS for its support and industry partners for their active participation.”
We see the Singapore hub rising in importance for FX markets and expect SGX CurrencyNode to support volume growth
Lim Cheng Khai, executive director, financial markets development department, MAS, adds, “MAS welcomes the debut of SGX CurrencyNode – a key addition to Singapore’s vibrant FX e-trading ecosystem. With global regulatory developments in margin requirements affecting the FX industry, there will be an increasing need for venues that seamlessly integrate OTC FX and listed futures. SGX Group’s investment in capabilities to meet this demand will further enhance Singapore’s value to market participants in the Asian timezone.”
Singapore has seen significant growth in FX volumes since opening SG1 as part of a commitment by the MAS to make the city state the leading e-FX hub in Asia. The Bank for International Settlement’s Triennial Survey is due for release in coming weeks, having been slightly delayed, but data from the Singapore Foreign Exchange Committee’s semi-annual turnover surveys indicates that average daily FX turnover has risen by 82% since the last BIS survey in 2019.
“We see the Singapore hub rising in importance for FX markets and expect SGX CurrencyNode to support volume growth,” says Olivia Frieser, head of global markets, Southeast Asia, India and Australia at BNP Paribas. “We look forward to supporting SGX CurrencyNode as prime broker, with our leading franchise in FX spot and NDF and extensive currency coverage.”
Darren Boulos, co-head of global FX for Asia Pacific at Deutsche Bank, adds, “Connectivity and deep credit relationships are central to a well-functioning electronic communication network. Being able to supply SGX CurrencyNode with key FX participants underscores the scale of our network, and more importantly, the performance and consistency that our forex business delivers year after year. From provisioning liquidity in spot markets to innovative solutions across the full product spectrum, we will continue to serve and cater to wide-ranging needs of our clients and partners.”