Difference between revisions of "Singapore Exchange Limited"

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{{Infobox_Company
 
{{Infobox_Company
 
| company_name =  Singapore Exchange, Ltd.
 
| company_name =  Singapore Exchange, Ltd.
 
| company_logo =  [[image:SGX_gradient_logo.jpg]]  
 
| company_logo =  [[image:SGX_gradient_logo.jpg]]  
| key_people =  Loh Boon Chye, CEO; Muthukrishnan Ramaswami, President  
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| key_people =  [[Loh Boon Chye]], CEO; [[Muthukrishnan Ramaswami]], President  
 
| foundation =  1999
 
| foundation =  1999
 
| location =  Singapore
 
| location =  Singapore
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| homepage=  [http://www.sgx.com www.sgx.com]
 
| homepage=  [http://www.sgx.com www.sgx.com]
 
}}
 
}}
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<div class="item">[http://www.marketsreformwiki.com/mktreformwiki/index.php/Foreign_Boards_of_Trade_Regulation Foreign Boards of Trade Regulation]</div>
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<div class="item">[http://www.marketsreformwiki.com/mktreformwiki/index.php/Cross-Border_Activities_Regulation Cross-Border Activities Regulation]</div>
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<div class="item">[http://www.marketsreformwiki.com/mktreformwiki/index.php/OTC_Derivatives_Regulation_-_Paper_-_Report_on_Agreed_Understandings_to_Resolving_Cross-Border_Conflicts,_Inconsistencies,_Gaps_and_Duplicative_Requirements,_August_2013 Report on Agreed Understandings to Resolving Cross-Border Conflicts, Inconsistencies, Gaps and Duplicative Requirements, August 2013]</div>
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<div class="item">[http://www.marketsreformwiki.com/mktreformwiki/index.php/Payment_and_Settlement_Systems_Regulation_-_White_Paper_-_Principles_for_Financial_Market_Infrastructures_-_CPSS/IOSCO,_April_2012 Principles for Financial Market Infrastructures - CPSS/IOSCO, April 2012]</div>
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The Singapore Exchange (SGX), created in 1999, is a multi-asset class equities and derivatives exchange, one of the largest in Asia.  
 
The Singapore Exchange (SGX), created in 1999, is a multi-asset class equities and derivatives exchange, one of the largest in Asia.  
  
SGX ranked 23rd among global derivatives exchanges by volume in 2015, with 183.8 million contracts traded, up from 120.3 million contracts a year earlier, according [[Futures Industry Association]] annual volume figures.  
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The exchange is structured into four business units: fixed income, currencies and commodities; equities; data connectivity and indices; and global sales and origination. The exchange set the new structure in July 2019.<ref>{{cite web|url=https://www2.sgx.com/media-centre/20190627-sgx-realigns-business-and-client-organisation-grow-and-scale-asset-classes|name=SGX realigns business and client organisation to grow and scale asset classes|org=SGX|date=June 27, 2019}}</ref> 
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SGX is the first Asian clearing house to clear OTC traded financial derivatives comprising [[interest rate swaps]] and non-deliverable Asian foreign exchange [[forwards]].<ref>{{cite web|url=http://www.sgx.com/wps/wcm/connect/sgx_en/home/higlights/news_releases/News_Update_27Sept2013|name=SGX wins industry endorsement as 2013 “Clearing House of the Year” and for “Most Innovative New Contract Launch”|org=SGX|date=September 27, 2013}}</ref> 
  
SGX is also the first Asian clearing house to clear OTC traded financial derivatives comprising [[interest rate swaps]] and non-deliverable Asian foreign exchange [[forwards]].<ref>{{cite web|url=http://www.sgx.com/wps/wcm/connect/sgx_en/home/higlights/news_releases/News_Update_27Sept2013|name=SGX wins industry endorsement as 2013 “Clearing House of the Year” and for “Most Innovative New Contract Launch”|org=SGX|date=September 27, 2013}}</ref>
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SGX ranked 22nd among global derivatives exchanges by volume in 2018, with 217 million contracts traded, up 21.8% from a year earlier, according to [[Futures Industry Association]] annual volume figures.<ref>{{cite web|url=https://marketvoice.fia.org/articles/record-year-derivatives|name=2018 Annual Volume Survey|org=Futures Industry.org|date=April 8, 2019}}</ref>  
  
 
== Background ==
 
== Background ==
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In May of 2014 SGX hired Ringo Chiu, former CEO at Citic Securities International, to head a new office in Hong Kong focused on derivatives. <ref>{{cite web|url=http://www.ft.com/intl/cms/s/0/90e536fe-d670-11e3-b251-00144feabdc0.html#axzz313wF9QkH|name=Singapore Exchange hires Citic exec for China derivatives push|org=The Financial Times|date=May 8, 2014}}</ref>
 
In May of 2014 SGX hired Ringo Chiu, former CEO at Citic Securities International, to head a new office in Hong Kong focused on derivatives. <ref>{{cite web|url=http://www.ft.com/intl/cms/s/0/90e536fe-d670-11e3-b251-00144feabdc0.html#axzz313wF9QkH|name=Singapore Exchange hires Citic exec for China derivatives push|org=The Financial Times|date=May 8, 2014}}</ref>
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In November 2016, SGX completed the acquisition of the [[Baltic Exchange]] for $108 million.<ref>{{cite web|url=https://www.businesstimes.com.sg/companies-markets/sgx-completes-baltic-exchange-acquisition|name=SGX completes Baltic Exchange acquisition|org=The Business Times|date=June 27, 2019}}</ref><ref>{{cite web|url=https://www.reuters.com/article/us-balticexchange-m-a-sgx/singapore-exchange-completes-takeover-of-londons-baltic-exchange-idUSKBN1331AZ|name=Singapore Exchange completes takeover of London's Baltic Exchange|org=Reuters|date=June 27, 2019}}</ref>
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On November 13, 2018, Singapore Exchange announced it would be launching a new securities settlement and depository framework and system on December 10 2018, enabling a shorter securities settlement cycle of two days (T+2) and simultaneous settlement of money and securities. The move from a T+3 to a T+2 settlement cycle would harmonise Singapore’s stock market with that of global markets including Australia, the European Union, Hong Kong and the US.<ref>{{cite web|url=http://sgx.com/wps/wcm/connect/sgx_en/home/higlights/news_releases/SGX_launches_new_securities_settlement_and_depository_system_T2_securities_settlement_cycle_from_10_December|name=SGX launches new securities settlement and depository system|org=SGX|date=November 13, 2018}}</ref>
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In May of 2018 the exchange took a minority stake in the London-based foreign exchange startup Cobalt, which is using distributed ledger technology to streamline post-trade settlements.<ref>{{cite web|url=https://www.forbes.com/sites/michaeldelcastillo/2018/05/04/sgx-backs-cobalt-dlt/#18e060a42ab7|name=Singapore Exchange Backs Distributed Ledger Alternative For FX Trading|org=Forbes|date=May 4, 2018}}</ref>
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In July 2019, the exchange invested in Smartkarma, an investment research platform that uses alternative data. The technology links institutional investors, analysts and listed companies to share research and interact.<ref>{{cite web|url=https://www.thetradenews.com/sgx-invests-research-platform-smartkarma/|name=SGX invests in research platform Smartkarma|org=The Trade|date=July 10, 2019}}</ref>
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In September 2019, SGX was named “Derivatives Exchange of the Year” by Asia Risk magazine for the sixth consecutive year. Asia Risk magazine highlighted SGX's portfolio compression services as a particular point of praise for the exchange.<ref>{{cite web|url=https://www2.sgx.com/media-centre/20190912-sgx-named-derivatives-exchange-year-asia-risk-sixth-consecutive-year|name=SGX named “Derivatives Exchange of the Year” by Asia Risk for sixth consecutive year|org=SGX (News Release)|date=September 12, 2019}}</ref>
  
 
== Products ==
 
== Products ==
  
SGX offers trading in securities, derivatives and commodities, and also offers clearing and settlement of [[swaps]]. Additionally, SGX offers market data and access services, as well as depository and broker services to all SGX securities members.  SGX introduced Asian foreign exchange futures for six currency pairs, AUD/USD, AUD/JPY, USD/SGD, INR/USD, KRW/USD and KRW/JPY, on November 11, 2013. <ref>{{cite web|url=http://asiaetrading.com/sgx-launches-asian-foreign-exchange-futures/|name=SGX Launches Asian Foreign Currency Futures|org=Asia ETrading|date=January 22, 2015}}</ref>
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SGX offers trading in securities, derivatives and commodities, including Asia’s broadest range of equity index derivatives, covering more than 80 percent of Asia’s economies – China, India, Indonesia, Japan, Taiwan, Thailand and Philippines. It also offers clearing and settlement of [[swaps]], as well as market data and access services, depository and broker services to all SGX securities members.   
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SGX introduced Asian foreign exchange futures for six currency pairs, AUD/USD, AUD/JPY, USD/SGD, INR/USD, KRW/USD and KRW/JPY, on November 11, 2013. <ref>{{cite web|url=http://asiaetrading.com/sgx-launches-asian-foreign-exchange-futures/|name=SGX Launches Asian Foreign Currency Futures|org=Asia ETrading|date=January 22, 2015}}</ref>
  
On March 5, 2014, SGX announced that its three index futures contracts based on the SGX MSCI Thailand Index, SGX PSE MSCI Philippines Index, and the SGX MSCI India Index, had been certified by the [[CFTC]]. The contracts are now directly offered for trading in the U.S. <ref>{{cite web|url=http://www.mondovisione.com/media-and-resources/news/sgx-asian-index-futures-contracts-gain-ctfc-approval/#90347|name=SGX Asian Index Futures Contracts Gain CFTC approval|org=Mondo Visione|date=March 5, 2014}}</ref>
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SGX began offering three index futures contracts based on the SGX MSCI Thailand Index, SGX PSE MSCI Philippines Index, and the SGX MSCI India Index, on March 5, 2014 for trading directly in the U.S. <ref>{{cite web|url=http://www.mondovisione.com/media-and-resources/news/sgx-asian-index-futures-contracts-gain-ctfc-approval/#90347|name=SGX Asian Index Futures Contracts Gain CFTC approval|org=Mondo Visione|date=March 5, 2014}}</ref>
  
On March 12, 2014, SGX announced it would introduce a new set of Asian currency futures to expand its existing suite of foreign exchange futures. The new set will include currency futures contracts on Chinese renminbi (RMB), Japanese yen and Thai baht. The exchange plans to introduce the new currency futures in the third quarter of 2014, subject to regulatory approval. <ref>{{cite web|url=http://www.sgx.com/wps/wcm/connect/sgx_en/home/higlights/news_releases/SGX-Introduces-RMB-FX-futures|name=SGX Introduces RMB FX futures|org=SGX News and Updates|date=March 12, 2014}}</ref>
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In 2014, SGX expanded its suite of foreign exchange futures to include currency futures contracts on Chinese renminbi (RMB), Japanese yen and Thai baht. <ref>{{cite web|url=http://www.sgx.com/wps/wcm/connect/sgx_en/home/higlights/news_releases/SGX-Introduces-RMB-FX-futures|name=SGX Introduces RMB FX futures|org=SGX News and Updates|date=March 12, 2014}}</ref>
  
In May 2014 the exchange said it would launch nine more commodity derivatives contracts over the next two months in coal and iron ore. Iron ore futures are its most active commodity derivatives contract.<ref>{{cite web|url=http://www.ft.com/intl/cms/s/0/90e536fe-d670-11e3-b251-00144feabdc0.html#axzz313wF9QkH|name=Singapore Exchange hires Citic exec for China derivatives push|org=The Financial Times|date=May 8, 2014}}</ref>   
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Also in 2014 the exchange launched nine commodity derivatives contracts in coal and iron ore. Iron ore futures are its most active commodity derivatives contract.<ref>{{cite web|url=http://www.ft.com/intl/cms/s/0/90e536fe-d670-11e3-b251-00144feabdc0.html#axzz313wF9QkH|name=Singapore Exchange hires Citic exec for China derivatives push|org=The Financial Times|date=May 8, 2014}}</ref>   
  
 
In November 2014, the Singapore stock exchange announced plans to begin a bond-trading platform by the middle of 2015. It will begin by trading Asian corporate bonds in G-3 currencies and follow that with Asian local currencies. SGX formed a unit, SGX Bond Trading, to offer the products and signed a contract with technology provider [[TradingScreen]].<ref>{{cite web|url=http://www.bloomberg.com/news/2014-11-26/singapore-exchange-to-start-bond-trading-platform-by-mid-2015.html|name=Singapore Exchange to Start Bond-Trading Platform by mid-2015|org=Bloomberg|date=November 26, 2014}}</ref>
 
In November 2014, the Singapore stock exchange announced plans to begin a bond-trading platform by the middle of 2015. It will begin by trading Asian corporate bonds in G-3 currencies and follow that with Asian local currencies. SGX formed a unit, SGX Bond Trading, to offer the products and signed a contract with technology provider [[TradingScreen]].<ref>{{cite web|url=http://www.bloomberg.com/news/2014-11-26/singapore-exchange-to-start-bond-trading-platform-by-mid-2015.html|name=Singapore Exchange to Start Bond-Trading Platform by mid-2015|org=Bloomberg|date=November 26, 2014}}</ref>
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== Technology ==  
 
== Technology ==  
The Singapore Exchange finalized a deal on Nov. 7, 2013 with the [[London Stock Exchange Group]]'s MillenniumIT to supply the technology for an upgrade of SGX’s securities clearing systems. The agreement will process deals in cash products such as equities and bonds. <ref>{{cite web|url=http://www.ft.com/intl/cms/s/0/22288898-47c2-11e3-b1c4-00144feabdc0.html#axzz2kM3Ap8n7|name=SGX settlement upgrade via LSE tech deal|org=The Financial Times|date=November 11, 2013}}</ref>
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The Singapore Exchange finalized a deal on Nov. 7, 2013 with the [[London Stock Exchange Group]]'s MillenniumIT to supply the technology for an upgrade of SGX’s securities clearing systems to process deals in cash products such as equities and bonds. <ref>{{cite web|url=http://www.ft.com/intl/cms/s/0/22288898-47c2-11e3-b1c4-00144feabdc0.html#axzz2kM3Ap8n7|name=SGX settlement upgrade via LSE tech deal|org=The Financial Times|date=November 11, 2013}}</ref>
  
SGX has an arrangement with [[Nasdaq]] to use its Genium INET technology to support the SGX trading and clearing platforms, beginning in late 2016.<ref>{{cite web|url=http://www.sgx.com/wps/wcm/connect/sgx_en/home/higlights/news_releases/sgxs-next-generation-derivatives-trading-and-clearing-platform-to-use-nasdaq-technology|name=SGX’s next-generation derivatives trading and clearing platform to use Nasdaq technology|org=SGX|date=January 22, 2015}}</ref>
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SGX has an arrangement with [[Nasdaq]] to use its Genium INET technology to support the SGX trading and clearing platforms.<ref>{{cite web|url=http://www.sgx.com/wps/wcm/connect/sgx_en/home/higlights/news_releases/sgxs-next-generation-derivatives-trading-and-clearing-platform-to-use-nasdaq-technology|name=SGX’s next-generation derivatives trading and clearing platform to use Nasdaq technology|org=SGX|date=January 22, 2015}}</ref>
  
The exchange expanded its reach into the US market with a technology deal with the [[CME Group]], which uses CME's data facility in Aurora, IL as an access hub to directly connect North American SGX customers to SGX. The deal, announced in November 2015, allows customers to offset positions on a number of contracts between SGX and CME Group, with 24-hour trading access and risk management. SGX also has data center links with other exchanges such as the [[Australian Securities Exchange]], [[Eurex]], [[Hong Kong Exchanges & Clearing]] and [[Japan Exchange Group]].<ref>{{cite web|url=https://leaprate.com/2015/11/sgx-establishes-presence-in-cme-group-co-location-data-centre-in-aurora-illinois/|name=SGX establishes presence in CME Group co-location data centre in Aurora, Illinois|org=SGX|date=November 30, 2015}}</ref>
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In 2015 the exchange expanded its reach into the US market with a technology deal with the [[CME Group]], which uses CME's data facility in Aurora, IL as an access hub to directly connect North American SGX customers to SGX. The deal allows customers to offset positions on a number of contracts between SGX and CME Group, with 24-hour trading access and risk management. SGX also has data center links with other exchanges such as the [[Australian Securities Exchange]], [[Eurex]], [[Hong Kong Exchanges & Clearing]] and [[Japan Exchange Group]].<ref>{{cite web|url=https://leaprate.com/2015/11/sgx-establishes-presence-in-cme-group-co-location-data-centre-in-aurora-illinois/|name=SGX establishes presence in CME Group co-location data centre in Aurora, Illinois|org=SGX|date=November 30, 2015}}</ref>
  
 
== Cross-Trading Agreement with CME ==
 
== Cross-Trading Agreement with CME ==
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|'''Total Annual Volume'''*  
 
|'''Total Annual Volume'''*  
 
|'''Percent Change'''
 
|'''Percent Change'''
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|- align="left" style="background:#EEEEEE;"
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|2017
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|217,387,520
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|21.8%
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|- align="left" style="background:#EEEEEE;"
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|2017
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|178,374,950
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|3.5%
 
|- align="left" style="background:#EEEEEE;"
 
|- align="left" style="background:#EEEEEE;"
 
|2016
 
|2016
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*[[Chng Lay Chew]], Chief Financial Officer
 
*[[Chng Lay Chew]], Chief Financial Officer
 
*[[Timothy Utama]], Chief Operations and Technology Officer
 
*[[Timothy Utama]], Chief Operations and Technology Officer
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*[[Rama Pillai]], Senior Vice President and Chief Commercial Officer
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*[[Lee Beng Hong]], Head of Fixed Income, Currencies and Commodities
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*[[Michael Syn]], Head of Equities
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*[[Ng Kin Yee]], Head of Data, Connectivity and Indices
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*[[Chew Sutat]], Head of Global Sales and Origination
 
*[[Lawrence Wong]], Head of Listings and China Business
 
*[[Lawrence Wong]], Head of Listings and China Business
*Yeo Lian Sim, Interim Chief Regulatory Officer  
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*[[Yeo Lian Sim]], Interim Chief Regulatory Officer  
*Agnes Siew-Koh, Chief Risk Officer
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*[[Agnes Koh]], Chief Risk Officer
  
 
== Initiatives ==
 
== Initiatives ==
The SGX has continued its trend of linking up with exchanges well beyond its shores to add trading [[volume]] and value. In March 2010 SGX joined with the [[National Stock Exchange of India]] (NSE) in a memorandum of understanding (MOU) to develop further NSE-linked products for listing on the SGX similar to its deal to list [[S&P CNX Nifty]] Futures, which has traded in Singapore since 2000.<ref>{{cite web|url=http://www.sgx.com/wps/wcm/connect/cp_en/site/press_room/news_releases/national+stock+exchange+of+india+and+singapore+exchange+to+explore+listing+more+india-linked+products+on+sgx?presentationtemplate=design_lib/PT_Printer_Friendly|name=National Stock Exchange of India and Singapore Exchange to explore listing more India-linked products on SGX|org=SGX|date=March 16, 2010}}</ref> As well as adding products, the SGX and the NSE will also explore bilateral trading links to allow the users of one exchange to also trade the other exchange seamlessly.
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The SGX has continued its trend of linking up with exchanges well beyond its shores to add trading [[volume]] and value. In March 2010 SGX joined with the [[National Stock Exchange of India]] (NSE) in a memorandum of understanding (MOU) to develop further NSE-linked products for listing on the SGX similar to its deal to list [[S&P CNX Nifty]] Futures, which have traded in Singapore since 2000.<ref>{{cite web|url=http://www.sgx.com/wps/wcm/connect/cp_en/site/press_room/news_releases/national+stock+exchange+of+india+and+singapore+exchange+to+explore+listing+more+india-linked+products+on+sgx?presentationtemplate=design_lib/PT_Printer_Friendly|name=National Stock Exchange of India and Singapore Exchange to explore listing more India-linked products on SGX|org=SGX|date=March 16, 2010}}</ref> As well as adding products, the SGX and the NSE will also explore bilateral trading links to allow the users of one exchange to also trade the other exchange seamlessly.
  
 
In February 2010, a handful of ASEAN countries including Singapore chose [[NYSE Technologies]] for the technology that would link their respective exchanges for growth in the region.  The Singapore Exchange, the [[Stock Exchange of Thailand]], the [[Philippine Stock Exchange]], [[Bursa Malaysia]] and the Indonesia Stock Exchange are involved in the project.  <ref>  {{cite web|url = http://ecnsexchanges.banking-business-review.com/news/asean_exchanges_select_nyse_technologies_to_build_trading_link_100208/|name= ASEAN Exchanges Select NYSE Technologies To Build Trading Link|org = ECNs and Exchange News|date = October 25, 2010}}</ref>
 
In February 2010, a handful of ASEAN countries including Singapore chose [[NYSE Technologies]] for the technology that would link their respective exchanges for growth in the region.  The Singapore Exchange, the [[Stock Exchange of Thailand]], the [[Philippine Stock Exchange]], [[Bursa Malaysia]] and the Indonesia Stock Exchange are involved in the project.  <ref>  {{cite web|url = http://ecnsexchanges.banking-business-review.com/news/asean_exchanges_select_nyse_technologies_to_build_trading_link_100208/|name= ASEAN Exchanges Select NYSE Technologies To Build Trading Link|org = ECNs and Exchange News|date = October 25, 2010}}</ref>
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SGX acquired the [[Baltic Exchange]] in 2016, in a deal that gave SGX access to a trading platform for the multibillion-dollar freight derivatives market. The SGX offer valued the Baltic Exchange at 87 million pounds.<ref>{{cite web|url=http://www.reuters.com/article/us-balticexchange-m-a-sgx-idUSKCN10X1JL|name=Baltic Exchange board backs SGX bid for London firm|org=Reuters|date=August 23, 2016}}</ref>
 
SGX acquired the [[Baltic Exchange]] in 2016, in a deal that gave SGX access to a trading platform for the multibillion-dollar freight derivatives market. The SGX offer valued the Baltic Exchange at 87 million pounds.<ref>{{cite web|url=http://www.reuters.com/article/us-balticexchange-m-a-sgx-idUSKCN10X1JL|name=Baltic Exchange board backs SGX bid for London firm|org=Reuters|date=August 23, 2016}}</ref>
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In May of 2018 the NSE and the Singapore Exchange abandoned talks on a cross-border trading link in the midst of a court battle that soured their 18-year partnership. The venture would have enabled traders in Singapore to buy and sell derivatives on exchanges in the Gujarat tax-free zone known as Gift City.<ref>{{cite web|url=https://www.businesstimes.com.sg/companies-markets/singapore-india-exchanges-abandoning-trade-link-talks|name=Singapore, India exchanges 'abandoning trade link talks'|org=The Business Times of Singapore|date=May 29, 2018}}</ref>
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The dispute brought about the end of Nifty 50 Index futures in Singapore, leaving international investors looking for another way to hedge their exposure to one of Asia's largest markets.
  
 
== Resources ==
 
== Resources ==

Latest revision as of 11:30, 12 September 2019

FTSE Russell banner 2016.gif
Singapore Exchange, Ltd.
SGX gradient logo.jpg
Founded 1999
Headquarters Singapore
Key People Loh Boon Chye, CEO; Muthukrishnan Ramaswami, President
Products Derivatives, Equities, AsiaClear OTC platform
Website www.sgx.com

The Singapore Exchange (SGX), created in 1999, is a multi-asset class equities and derivatives exchange, one of the largest in Asia.

The exchange is structured into four business units: fixed income, currencies and commodities; equities; data connectivity and indices; and global sales and origination. The exchange set the new structure in July 2019.[1]

SGX is the first Asian clearing house to clear OTC traded financial derivatives comprising interest rate swaps and non-deliverable Asian foreign exchange forwards.[2]

SGX ranked 22nd among global derivatives exchanges by volume in 2018, with 217 million contracts traded, up 21.8% from a year earlier, according to Futures Industry Association annual volume figures.[3]

Background

The SGX was created on Dec. 1, 1999, following the merger of the Stock Exchange of Singapore and the Singapore International Monetary Exchange, and successfully demutualized and listed its shares on its own bourse in December 2000. Five years later SGX expanded into commodities trading through a joint venture with the Chicago Board of Trade called the Joint Asian Derivatives Exchange (JADE). Later that year the SGX re-launched Catalist, its second listing board for faster-growing securities that was previously known as SESDAQ.[4] In 2009 SGX formed a joint venture with Chi-X Global to launch the world's first exchange-backed dark pool due to commence in mid-2010.

SGX acquired the Singapore Commodity Exchange (SICOM) in June 2008.

In 2009 the SGX was officially recognized for its outstanding over-the-counter (OTC) derivatives market, SGX AsiaClear, by receiving its second Asia Exchange of the Year award from Energy Risk magazine.[5] In granting the award, presenters cited the SGX's new product innovation in areas such as clearing mini fuel oil contracts and OTC cleared iron ore swaps. SGX AsiaClear, launched by the SGX in 2006, is Asia's only OTC clearing platform for traded derivatives and currently boasts 424 counterparties.

SGX also entered into several agreements with other exchanges, including a deal in mid-2009 with Norway's Oslo Børs (Oslo Bourse) to co-operate on secondary listings in energy, oilfield services and shipping.[6]

Later in 2009, the SGX announced a joint market-development agreement with Taiwanese exchange GreTai Securities Market as part of SGX's "Asian Gateway" strategy for market growth.[7] The SGX forged joint ventures with exchanges in India and Taiwan and plans to be the world's first official trading exchange to back an investment dark pool.

In July of 2012, SGX and Securities Investors Association (SIAS) announced they would sign a memorandum of understanding (MOU) to formalize their commitment over the next three years to bring investing to the community.[8]

On January 02, 2014, SGX-DC, the clearing arm of SGX became the first Asian firm to be granted registration as a Derivatives Clearing Organization by CFTC. It enabled US persons to clear onshore in Singapore with SGX-DC all swaps the central counterparty (CCP) currently clears. SGX clearing members not registered with the CFTC as Futures Commission Merchants can continue clearing swap contracts for US persons via SGX-DC, following an extension of the no-action relief letter from CFTC to March 31, 2014.

In addition, SGX-DC and SGX's securities clearing house, The Central Depository, had also applied to the ESMA for recognition as a third party CCP in order to continue providing clearing services to European Union customers. [9]

In May of 2014 SGX hired Ringo Chiu, former CEO at Citic Securities International, to head a new office in Hong Kong focused on derivatives. [10]

In November 2016, SGX completed the acquisition of the Baltic Exchange for $108 million.[11][12]

On November 13, 2018, Singapore Exchange announced it would be launching a new securities settlement and depository framework and system on December 10 2018, enabling a shorter securities settlement cycle of two days (T+2) and simultaneous settlement of money and securities. The move from a T+3 to a T+2 settlement cycle would harmonise Singapore’s stock market with that of global markets including Australia, the European Union, Hong Kong and the US.[13]

In May of 2018 the exchange took a minority stake in the London-based foreign exchange startup Cobalt, which is using distributed ledger technology to streamline post-trade settlements.[14]

In July 2019, the exchange invested in Smartkarma, an investment research platform that uses alternative data. The technology links institutional investors, analysts and listed companies to share research and interact.[15]

In September 2019, SGX was named “Derivatives Exchange of the Year” by Asia Risk magazine for the sixth consecutive year. Asia Risk magazine highlighted SGX's portfolio compression services as a particular point of praise for the exchange.[16]

Products

SGX offers trading in securities, derivatives and commodities, including Asia’s broadest range of equity index derivatives, covering more than 80 percent of Asia’s economies – China, India, Indonesia, Japan, Taiwan, Thailand and Philippines. It also offers clearing and settlement of swaps, as well as market data and access services, depository and broker services to all SGX securities members.

SGX introduced Asian foreign exchange futures for six currency pairs, AUD/USD, AUD/JPY, USD/SGD, INR/USD, KRW/USD and KRW/JPY, on November 11, 2013. [17]

SGX began offering three index futures contracts based on the SGX MSCI Thailand Index, SGX PSE MSCI Philippines Index, and the SGX MSCI India Index, on March 5, 2014 for trading directly in the U.S. [18]

In 2014, SGX expanded its suite of foreign exchange futures to include currency futures contracts on Chinese renminbi (RMB), Japanese yen and Thai baht. [19]

Also in 2014 the exchange launched nine commodity derivatives contracts in coal and iron ore. Iron ore futures are its most active commodity derivatives contract.[20]

In November 2014, the Singapore stock exchange announced plans to begin a bond-trading platform by the middle of 2015. It will begin by trading Asian corporate bonds in G-3 currencies and follow that with Asian local currencies. SGX formed a unit, SGX Bond Trading, to offer the products and signed a contract with technology provider TradingScreen.[21]

In January 2015 it was reported that the exchange was in talks with the China Securities Regulatory Commission to begin trading Chinese equity-index options, beginning with options on the FTSE China A50 Index. [22]

In October 2015, SGX launched the Asian liquefied natural gas (LNG) spot price index, SGX LNG Index Group (SLInG), together with its subsidiary Energy Market Company (EMC) and later launched cash-settled SLInG LNG swaps and futures to address the growing need for risk management, and also to support the continued growth of LNG trading in Asia.

On August 29, 2016 SGX launched the SGX APAC ex Japan Dividend Leaders REIT Index, composed of 30 real estate investment trusts (REITs) across the Asia Pacific ex Japan region. It will be the first SGX index to be used as a benchmark index for a new exchange-traded fund (ETF) issued by Phillip Capital Management. It is composed entirely of REITs in the Asia Pacific region that are dividend weighted.[23]

Contracts Listed

Technology

The Singapore Exchange finalized a deal on Nov. 7, 2013 with the London Stock Exchange Group's MillenniumIT to supply the technology for an upgrade of SGX’s securities clearing systems to process deals in cash products such as equities and bonds. [24]

SGX has an arrangement with Nasdaq to use its Genium INET technology to support the SGX trading and clearing platforms.[25]

In 2015 the exchange expanded its reach into the US market with a technology deal with the CME Group, which uses CME's data facility in Aurora, IL as an access hub to directly connect North American SGX customers to SGX. The deal allows customers to offset positions on a number of contracts between SGX and CME Group, with 24-hour trading access and risk management. SGX also has data center links with other exchanges such as the Australian Securities Exchange, Eurex, Hong Kong Exchanges & Clearing and Japan Exchange Group.[26]

Cross-Trading Agreement with CME

Beginning in 1984, the SGX and CME established a mutual offset system agreement, giving market participants the choice of clearing Eurodollar, Euroyen Futures and yen-denominated Nikkei 225 futures at either CME or SGX. Prior to CME's trading hour expansion, traders could shift from one platform to another, essentially opening a 24-hour trading day for the three contracts.

Volumes

Year Total Annual Volume* Percent Change
2017 217,387,520 21.8%
2017 178,374,950 3.5%
2016 172,421,585 (-)6.2%
2015 183,870,944 52.7%
2014 120,398,368 7.4%
2013 112,077,267 39.1%
2012 80,548,318 11.4%
2011 72,119,650 17.1%
2010 61,593,687 16.0%
2009 53,237,389 --

2016

Exchange Volume Percent Change
Singapore Exchange 156,802,499 (-)10.9%
SGX Asiaclear 15,619,086 97.2%
Singapore Exchange Ltd 172,421,585 (-)6.2%

Key People

Initiatives

The SGX has continued its trend of linking up with exchanges well beyond its shores to add trading volume and value. In March 2010 SGX joined with the National Stock Exchange of India (NSE) in a memorandum of understanding (MOU) to develop further NSE-linked products for listing on the SGX similar to its deal to list S&P CNX Nifty Futures, which have traded in Singapore since 2000.[27] As well as adding products, the SGX and the NSE will also explore bilateral trading links to allow the users of one exchange to also trade the other exchange seamlessly.

In February 2010, a handful of ASEAN countries including Singapore chose NYSE Technologies for the technology that would link their respective exchanges for growth in the region. The Singapore Exchange, the Stock Exchange of Thailand, the Philippine Stock Exchange, Bursa Malaysia and the Indonesia Stock Exchange are involved in the project. [28]

In October of 2010, the Singapore Exchange and the Australian Securities Exchange entered into a merger agreement intended to create Asia's second largest exchange group behind Hong Kong Exchange and Clearing. SGX offered the equivalent of US$8.2 billion for the Australian Exchange.[29] However, in April of 2011 the Australian government blocked the merger and ASX withdrew its bid.

In August 2011, SGX launched its Reach trading engine in an effort to improve market quality and liquidity. It is the world's fastest trading engine and offers 10 times more capacity.[30]

On Oct. 1, 2014 SGX acquired the remaining 51 per cent stake in the operator of Singapore's national electricity market, Energy Market Co (EMC) for $23 million, giving it a platform for electricity and other energy futures contracts. SGX had already bought 49 per cent of EMC in August 2012. NEMS is the first liberalized spot electricity market in Asia. The Energy Market Authority (EMA) regulates EMC.[31] SGX began trading electricity futures in June 2015.[32]

SGX acquired the Baltic Exchange in 2016, in a deal that gave SGX access to a trading platform for the multibillion-dollar freight derivatives market. The SGX offer valued the Baltic Exchange at 87 million pounds.[33]

In May of 2018 the NSE and the Singapore Exchange abandoned talks on a cross-border trading link in the midst of a court battle that soured their 18-year partnership. The venture would have enabled traders in Singapore to buy and sell derivatives on exchanges in the Gujarat tax-free zone known as Gift City.[34]

The dispute brought about the end of Nifty 50 Index futures in Singapore, leaving international investors looking for another way to hedge their exposure to one of Asia's largest markets.

Resources

References

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  3. 2018 Annual Volume Survey. Futures Industry.org.
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  18. SGX Asian Index Futures Contracts Gain CFTC approval. Mondo Visione.
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  21. Singapore Exchange to Start Bond-Trading Platform by mid-2015. Bloomberg.
  22. SGX Plans China Equity-Index Options on Futures Demand. Bloomberg.
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