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Screenshot of a breaking news alert e-mail from Q2 2017
In the institutional FX sector, Singapore remains Asia’s top destination. Not only is its banking industry responsible for the vast majority of Asian FX order flow, but its exchange-traded FX is also prominent.
This is evident by Singapore Exchange (SGX)’s trend-bucking volumes for July 2014, which have increased dramatically when compared to those of last month. SGX today announced, along with its volume statistics for the month of June for all asset classes, that the volume of SGX foreign exchange futures tripled from a month earlier to 43,000 contracts. Volume of new OTC Singapore Dollar interest rate swaps cleared was S$4.2 billion, doubling month on month but 19% lower year on year.
Singapore enjoys a solid reputation as a financially stable and well organized financial center, and subsequent to the global financial crisis of 2008 when the entire structure of OTC derivatives trading came into question by Western regulators, with the US applying new rulings requiring central counterparties for processing transactions, many participants began exploring exchange-traded FX in safe jursidictions which were free from financial woes.
In North America and Europe, NASDAQ OMX and CME have begun expanding their services down the route of exchange traded FX, however it is clear by these figures that Asia’s institutional trader base is embracing it at a time when OTC volumes worldwide are in the doldrums.