EBS BrokerTec, ICAP’s FX and fixed income business, and Singapore Exchange (SGX), signed today an agreement to launch SGX listed FX block futures on EBS BrokerTec’s FX central limit order book, EBS Market. The collaboration between EBS and SGX announced in January 2015 is meant to connect the OTC FX and futures markets.
Today’s agreement is said to enable seamless access to an enhanced liquidity pool for trading Asian Spot, NDF and Futures instruments. The initial offering will include Singapore Exchange block futures in Indian Rupee (INR), South Korean Won (KRW), China Offshore Spot (CNH), Singapore Dollar (SGD) and Chinese Yuan (CNY).
According to the venue, the listed FX block futures will be available on EBS Market in early Q2 2016, pending regulatory approval, and they will be cleared through SGX’s trade registration system, Titan OTC. EBS BrokerTec’s direct connectivity into Titan OTC will provide automated straight-through-processing for trades matched electronically on EBS Market and SGX’s central clearing will provide capital efficiency.
Michael Spencer, Group CEO of ICAP Plc and Chairman of EBS BrokerTec, said, “I’m extremely pleased that we have signed a collaboration agreement with SGX to launch SGX listed FX block futures on EBS Market. Our partnership will allow us to develop new business opportunities and product offerings, and significantly strengthen liquidity in the FX OTC and futures markets. This is an exciting opportunity for ICAP, our customers and for the financial markets in Asia and we look forward to the launch next year.”
Loh Boon Chye, CEO of SGX, said, “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.”
Exponential growth in Asian currencies
The two sides also boasted today that they have both seen explosive growth in Asian currency businesses.
SGX reports its trading volumes have increased across the fifteen FX futures contracts it offers, and in particular the INR/USD and USD/CNH contracts. Average daily volumes of the INR/USD contract exceed $700 million in notional value traded per day. The USD/CNH contract has surged more than fourfold since its launch a year ago, exceeding $19 billion in total notional value traded.
EBS says that 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% annual growth for KRW and 14% 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.