SINGAPORE - The Singapore Exchange has inked an agreement with EBS BrokerTec, ICAP's electronic foreign exchange (FX) and fixed income business, to launch SGX FX block futures on the EBS Market.
In a statement on Thursday (Nov 19), SGX said the agreement will enable market participants to seamlessly access an "enhanced liquidity pool for trading Asian Spot, NDF and Futures instruments via the EBS Market", which is a primary venue for e-traded currencies.
The listed FX block futures will be available on EBS Market in the early part of the second quarter in 2016, pending regulatory approval.
SGX added that the initial offering will include SGX block futures in Indian Rupee, Korean Won, Singapore dollar, and onshore and offshore Renminbi.
This is the first initiative that EBS BrokerTec and SGX will bring to the market, as part of a long-term strategic partnership.
SGX chief executive Loh Boon Chye said in the statement: "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."
ICAP said the partnership will help in efforts towards developing new products and services that complement and grow the FX Over-The-Counter (or OTC) and futures markets in Asia.
"Our partnership will allow us to develop new business opportunities and product offerings, and significantly strengthen liquidity in the FX OTC and futures markets," said Mr Michael Spencer, group chief executive officer of ICAP and chairman of EBS BrokerTec.
SGX and EBS BrokerTec have both seen exponential growth in Asian currency volumes for their businesses.
SGX said its trading volumes have increased across its suite of 15 listed FX futures contracts, in particular the Rupee/USD and USD/offshore RMB contracts.
Average daily volumes of the Rupee/USD contract exceed US$700 million (S$992 million) in notional value traded per day.
The USD/offshore RMB contract has surged more than fourfold since inception 12 months ago to over US$19 billion in total notional value traded, SGX added.
The increasing move towards electronic trading of non-deliverable forwards (NDFs) has led to a significant uptick in EBS Market NDF volumes.
The exchange said INR and KRW remain two of the most actively traded NDFs on EBS Market. Sustained growth was also seen in offshore and onshore Renminbi, and the Singdollar.