Singapore Exchange (SGX) on Monday launched its clearing service for over-the-counter (OTC) traded Asian Foreign Exchange (FX) Forwards (non-deliverable).
Deutsche Bank, DBS Bank and OCBC Bank cleared their first Asian FX Forwards with the exchange.
A world’s first, this initiative is aligned with global developments towards central counterparty clearing (CCP) of OTC derivatives to promote systemic stability in financial markets, SGX said.
The clearing of Asian FX Forwards covers non-deliverable Asian currencies, namely the Chinese yuan, Indian rupee, Korean won, Indonesian rupiah, Malaysian ringgit, Philippine peso and Taiwanese dollar.
“Launched in close collaboration with our members, the Asian FX Forwards clearing service will accord our members capital and operational efficiencies. This service is well aligned with global regulatory reform and will encourage the adoption of CCP clearing of OTC traded products in Asia,” Muthukrishnan Ramaswami, President of SGX, said in a statement.
The launch of FX Forwards by SGX follows the November 2010 clearing service for Interest Rate Swaps denominated in Singapore and US dollars.
The 11 SGX Clearing Members eligible to clear FX Forwards are Barclays Bank Plc, Citibank N.A., Credit Suisse AG, DBS Bank Limited, Deutsche Bank AG, The Hong Kong and Shanghai Banking Corporation Ltd, OCBC Bank, Standard Chartered Bank, The Royal Bank of Scotland Plc, UBS AG, and United Overseas Bank Ltd.
SGX said it expects the membership to grow in the next few months with membership interest from all banks active in these products.