UOB to set up electronic FX pricing and trade engine in Singapore

UOB on Monday said it will set up an electronic foreign exchange (FX) pricing and trading engine in Singapore, acting as the hub to service the bank's client franchise.

The new engine will be launched by the second quarter next year, the lender noted in a press statement.

"UOB will take advantage of reduced latency via co-location connectivity to improve price discovery and to enhance pricing capability. This will enable the bank's clients to tap the available market liquidity with greater efficiency," the bank said.

Leslie Foo, head of group global markets at UOB, noted that with the bank's latest initiative, UOB joins other major FX participants in serving "strong institutional FX flows in Asia".

The establishment of UOB's FX pricing and trading engine is supported by the Monetary Authority of Singapore (MAS) and contributes to Singapore's aim of growing its FX market into the electronic trading centre for the region.

Said Lim Cheng Khai, executive director of the financial markets development department at MAS: "UOB's establishment of its FX pricing and matching engine in Singapore, alongside the strong pool of global FX liquidity providers here, marks another important milestone in Singapore's role as the global FX price discovery and liquidity centre in the Asian time zone.

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"It remains a key priority for MAS to further broaden and deepen our FX market, and we welcome more buy-side participants to join the fast-growing FX e-trading ecosystem in Singapore."

UOB's latest move comes after several other global banks have announced plans to do the same. They include JPMorgan Chase & Co, BNP Paribas, UBS and Standard Chartered.

In mid-September, Barclays said it will be launching its new FX trading and pricing engine in Singapore, as part of the London-headquartered bank's push to strengthen its FX presence in the Asia-Pacific. Scheduled to be launched in mid-2021, the new engine will be Barclays' fourth electronic FX trading hub globally, adding to its existing platforms in New York, London and Tokyo.

Later that month, Goldman Sachs also announced that it will build an electronic FX pricing engine in Singapore to deliver low-latency execution for its clients. Its first clients are scheduled to be live in the first quarter next year, across deliverable and non-deliverable currencies, the US-based investment bank said.

Separately, in response to queries from The Business Times on Monday, a spokesperson from Citigroup said the bank's electronic FX pricing and trading platform has been up and running since late 2019.

Amid declines among the banking stocks, UOB shares were trading at $22.81 as at 11.43am on Monday, down S$0.25, or 1.1 per cent.