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SINGAPORE Exchange (SGX) has partnered EBS BrokerTec, ICAP's electronic foreign exchange (FX) and fixed income business, to launch SGX-listed FX block futures on EBS BrokerTec's FX central limit order book, EBS Market, a primary venue for e-traded currencies.
In a joint release, the companies said the agreement would enable market participants to seamlessly access an enhanced liquidity pool for trading Asian Spot, NDF and Futures instruments via the EBS Market.
The listed FX block futures will be available on EBS Market in early Q2 2016 pending regulatory approval. Trades will be cleared through SGX's next generation trade registration system, Titan OTC. The initial offering will include SGX block futures in Indian rupee (INR), South Korean won (KRW), offshore renminbi (CNH), Singapore dollar (SGD) and onshore renminbi (CNY).
EBS BrokerTec's direct connectivity into Titan OTC will provide customers with automated straight-through-processing for trades matched electronically on EBS Market and SGX's central clearing will provide increased capital efficiency.
SGX's CEO, Loh Boon Chye, added: "This collaboration is a sign of our commitment to innovate and grow the Asian currency futures market. It will also provide a mutually beneficial market for both our customers given the strength of EBS' network and SGX's risk management and clearing tools.
"We look forward to further collaboration with ICAP and EBS BrokerTec to develop new products and services that complement and grow the FX OTC and futures markets in Asia."
Both EBS BrokerTec and SGX claim to have seen exponential growth in Asian currency volumes for their respective businesses.
SGX trading volumes have increased across its suite of 15 listed FX futures contracts, in particular the INR/USD and USD/CNH contracts. Average daily volumes of the INR/USD contract exceed US$700 million in notional value traded per day. The USD/CNH contract has surged more than fourfold since inception 12 months ago to exceed US$19 billion in total notional value traded, helping to establish it as the most liquid offshore RMB futures product traded across global futures exchanges.
The increasing move towards electronic trading of NDFs has led to a significant uptick in EBS Market NDF volumes. INR and KRW remain two of the most actively traded NDFs on EBS Market, marked by 30 per cent annual growth for KRW and 14 per cent for INR volumes respectively and record end-of-month volumes for both currencies in Q3 2015. Sustained growth was also seen in CNH, CNY, and SGD.