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Singapore Exchange to acquire BidFX and expand its reach into global FX OTC market



Singapore Exchange announced its plans to acquire the remaining 80% stake in cloud-based FX trading platform for institutional investors BidFX for approximately $128 million in order to expand the reach of the multi-assets exchange into global FX OTC market

Initially, SGX acquired 20% of BidFX in March 2019 aiming to bring together FX futures with OTC markets. SGX’s goal is to support FX participants from pre-trade data and analytics, through trade execution to post-trade clearing was advanced by the decision to acquire the rest of BidFX. The transaction is expected to complete in July 2020.

Recently, BidFX has seen record trading volumes. Since its establishment in January 2017, average daily volumes have increased at a compounded annual growth rate (CAGR) of 57%, reaching $31 billion in May 2020. BidFX continues to onboard new clients, with more than 100 of the world’s largest banks, hedge funds and asset managers currently connected to its platform.

The FX market is currently the largest financial market with average daily turnover in the OTC market of $6.6 trillion by traded volume. The size of the exchange-traded FX derivatives market amounts to only about 2% of the OTC market, presenting opportunities for SGX to build on its presence in the Asian FX futures and expand into global OTC FX market.

Loh Boon Chye, Chief Executive Officer of SGX, commented:

Loh Boon Chye

The future of FX lies in the ability for market participants to benefit from price discovery, liquidity and transparency for both OTC and listed futures trading, in a single unified venue. BidFX is ahead of the curve in developing sophisticated electronic FX trading and workflow solutions. With BidFX as part of the SGX Group, we can now serve a wider FX community with more comprehensive solutions and enhanced distribution capabilities, while bringing together the two growing and mutually-reinforcing pools of liquidity.

Acquisition

Jean-Philippe Malé, CEO of BidFX, said:

Jean-Philippe Malé, BidFX
Jean-Philippe Male

We are delighted to join the SGX group of companies and combine forces with the largest FX futures marketplace in Asia. We will be, amongst other plans, expanding our coverage to include FX futures, which gives sophisticated investors a hedge to access the broader market across OTC and futures liquidity pools. As we continue to grow, we look forward to contributing to Singapore’s success as a central FX liquidity hub in Asia.

Previously, BidFX was a subsidiary of TradingScreen and spun off in 2017.

Pierre Schroeder, CEO of TradingScreen, noted:

We’ve purposefully focused our efforts and resources on our best opportunities for growth and this has led to exceptional results, such as the BidFX sale being announced today. TradingScreen clients will continue to have access to BidFX via its multi-asset TradeSmart application.

Since the beginning of 2020, BidFX’s clients were able to trade across OTC and futures FX markets with the option to have bilateral counterparty or centrally cleared FX exposures, all in one venue with an integrated workflow management system.

SGX’s FX futures have registered significant growth, reaching traded volumes of $3.8 trillion since it started in November 2013. SGX launched FlexC FX Futures last year allowing market participants to trade customizable FX futures in an OTC manner and clear transactions.

The combination of SGX and BidFX will scale up the success of both companies and advance SGX’s goal to offer end-to-end FX platform and solutions.

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Singapore Exchange to acquire BidFX and expand its reach into global FX OTC market

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