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View, trade and settle in various currencies: SGX trials view-only prototype service
THE Singapore Exchange (SGX) is looking into a new service that will allow investors to view, trade and settle in multiple currencies in addition to exchange-listed ones.
In partnership with SGX, home-grown fintech firm M-Daq has developed a prototype solution for investors to view real-time prices of the component stocks of the Straits Times Index in selected currencies, the bourse operator disclosed on its website on Tuesday.
At present, foreign exchange rates are determined only after trades have been made. A multi-currency trading service will help investors increase their investment yield and manage risks caused by foreign exchange movements, said SGX.
On its website, SGX invited investors to try out the view-only prototype and provide feedback on it. Comparison charts are also available for them to assess historical stock prices against the various currencies.
"The ability to trade in multiple portfolio currencies will enhance risk management and access to our securities market, which is home to many international issuers and investors," SGX executive vice-president and head of equities and fixed income, Chew Sutat, said in a press statement.
"We are excited to develop new solutions with one of Singapore's most established homegrown fintech companies to further grow the securities market ecosystem in Singapore," he added.
M-Daq chief executive officer Richard Koh said: "The M-Daq solution was developed for global exchanges like SGX to facilitate international trading of equities and increase velocity of trade due to price certainty."
Its patented solution allows investors to view, track and trade securities in multiple currencies within a single liquidity pool. This will allow investors to have price certainty including the ability to place limit orders in their preferred foreign currencies, said M-Daq.
It also democratises cross-border trading by giving all investors, both institutional and retail, embedded interbank forex pricing at the point of transaction without slippage, the firm added.
Mr Koh told The Business Times that the idea for a multi-currency solution came about when he was working for JPMorgan in the early 2000s, running their FX e-commerce business for Asia. Back then, a large part of his bonus was in the form of restricted shares of the bank, which is listed in the US and hence has its shares denominated in USD.
"In order to figure out my daily 'net worth', I created a small spreadsheet to re-denominate the JPM.US shares into SGD. This idea gave birth to M-Daq when I went independent with my ex-colleagues in late 2009," Mr Koh told BT.
"We have extensively tested this solution at many of the global exchanges and passed all the tests to be an 'exchange-grade solution' even as early as mid-2012," he added.
Founded in 2010, M-Daq, which is backed by investors such as the EDBI - the investment arm of the Economic Development Board - and Alibaba affiliate Ant Financial, recently registered its first profitable quarter in May 2018. It is currently a key partner to several e-commerce and payment systems.