SINGAPORE EXCHANGE LIMITED Singapore Exchange (SGX) is adding new Asian foreign exchange (FX) futures contracts on Chinese Renminbi ("RMB") (USD/CNH, CNY/USD), Japanese Yen (USD/JPY) and Thai Baht (THB/USD), to further augment its successful suite of FX offerings. The new Asian FX contracts will be available for trading from 20 October 2014. The expanded suite of SGX FX futures offerings is in line with G20 recommendation to encourage trading of derivatives on exchanges or electronic platforms. This will provide an avenue for investors to efficiently manage their Asian currency risks via a transparent, margin-efficient and well-regulated marketplace.
SGX is also pleased that the Bank of China (BOC) will be the pioneer market-maker for its RMB futures and welcomes BOC as SGX's first Chinese settlement bank for its derivatives market. This development underpins the partnership agreement signed between SGX and BOC in September last year.
"Today marks another significant milestone for SGX. FX, as an asset class, is highly complementary to SGX's equities and commodities franchise. The enhanced SGX Asian FX suite widens the window for even more investors to tap on the growth opportunities across major Asian markets and manage their currency exposures at the same time. The SGX RMB futures complements the range of RMB-denominated investment products in Singapore, and will further boost the growth and deployment of the RMB deposits pool in Singapore," said Magnus Böcker, CEO of SGX.
"The partnership is also an important step forward in BOC's strategy to facilitate the internationalisation of RMB. As SGX's first Chinese settlement bank and pioneer market maker for SGX RMB Futures, BOC is well placed to demonstrate our leading expertise in the RMB business and our commitment to providing quality financial services to both local and global customers," said Madam Guo Ning Ning, General Manager, Bank of China, Singapore Branch.
Singapore is today the world's third largest FX market and a leading price discovery centre for major Asian currencies. SGX's suite of Asian FX futures provides market participants with a regulated exchange platform for price discovery of key Asian currencies, promoting greater transparency and better serving investment and risk management needs in the Asian time zone.
In November 2013, SGX introduced its first suite of six FX Futures pairs to allow investors to manage their FX risk on the same venue as their equity index exposure. These six pairs are the AUD/USD, AUD/JPY, USD/SGD, INR/USD, KRW/USD and KRW/JPY, which have registered more than US$7 billion in aggregate notional value traded since launch. In addition to its Asian FX futures, SGX is the first central counterparty in this region to clear over-the-counter non-deliverable FX forwards in seven Asian currencies, and interest rate swaps.
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