Asia Pacific’s top foreign exchange and derivatives market continually evolves new capabilities to allow greater efficiencies

  • Singapore is the venue for currency settlement and issuance of renminbi-denominatd instruments in ASEAN
  • Singapore is an unrivaled financal hub in Southeast Asia and is increasingly a prominent wholesale funding centre in both the debt and equity markets for wider Asia region
  • It is the world's third largest foreign exchange centre and has very deep US dollar funding capabilities. 

In addition to the thousands of multinational corporations that use Singapore as their regional headquarters, Singapore also hosts more than 5,000 companies from mainland China who use Singapore as a launchpad for their Southeast Asian trade.

“There’s a demand for trade finance, there’s a demand for cash management (in Singapore) and this is what makes a difference,” Ng of MAS said. 

A global financial centre in Asia focusing on foreign exchange and derivatives

Singapore is the third largest FX centre globally after London and New York, and is the largest in Asia Pacific. Everyday, over half a trillion US dollars of FX is traded in Singapore. The FX sector is pivotal to Singapore's standing as a major trading and corporate treasury hub in the region, and underpins the vibrancy of Singapore's international financial centre.

With all of the top five global banks housing their regional FX sales and trading teams here, Singapore offers a deep and liquid market for the trading and hedging of G10 currencies, as well as Asian emerging market currencies.

As a major FX centre globally, Singapore's FX market is set up to serve the growing trading and hedging needs in the region. E-trading infrastructure, developed by banks and various trading platforms, is at the forefront of improving price discovery and FX trade execution in the region, and market participants benefit from better latency, pricing and liquidity in FX and OTC derivatives trading.

Besides Singapore's strength in OTC derivatives globally,  Singapore's exchanges also offer a comprehensive suite of exchange-traded FX futures and options contracts to complement the OTC market in offering more hedging products and solutions to market participants. 

"We aim for Singapore to be the e-trading ecosystem in the region. We are encouraging and working with key FX players and platforms to anchor their e-trading facilities, matching and pricing engines in Singapore,"  Jacqueline Loh, Deputy Managing Director, MAS during Keynote Speech at the 14th FX Week Asia Conference, 29 August 2018

Global FX discovery

 Singapore is the global FX price discovery and liquidity centre in Asia, and growing the e-trading ecosystem in Singaporeenhances support for the investor base and growth of Asian FX markets. This is a strategic development outlined in MAS’ Financial Services Industry Transformation Map (“ITM”), rolled out in Oct 2017. 

MAS supports first movers in primary inter-dealer platforms, multi-dealer platforms and liquidity providers to set up matching and pricing/ trading engines in Singapore.

Key Facts

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Regulations and Licensing

Singapore, under the MAS, regulates market operators or venues under two categories - Approved Exchanges (“AE”) and Recognised Market Operators (“RMO”). Systematically-important market operators are regulated as AEs and are subject to a higher level of statutory obligations, while other market operators are regulated as RMOs. 

Dealing in capital markets products, including securities, units in a collective investment scheme, exchange-traded derivatives contracts, OTC derivatives contracts and spot foreign exchange contracts for the purposes of leveraged foreign exchange trading, is a regulated activity under the Securities and Futures Act, and financial institutions conducting this activity in Singapore will need to apply for the Capital Markets Services (“CMS”) license.

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