Global Exchange of the Year: SGX

What a year it has been for the Singapore Exchange. Volumes have soared during the judging period with trading levels up more than 60% year-on-year. 2015 is set to smash all records for trading following a surge in trading on the A50 China index contract. 

On the back of this, SGX takes home the award for Exchange of the Year - Asia, Australasia and MEA and Global Exchange of the Year. 

SGX has a strategy to become the gateway to the ASEAN market. In February 2015, it launched the MSCI Malaysia futures, expanding its Asian Equity derivatives suite to cover 95% of Asia’s US$22.7 trillion GDP. 

SGX’s MSCI Indonesia futures traded US$4 billion during the period while its MSCI Thailand futures volume grew 150% year-on-year.

The exchange’s Nifty futures and MSCI India futures are the only liquid offshore Indian equity index futures, accounting for 75% of open interest globally. 

The exchange has also grown its commodities clearing and OTC business substantially with strong growth its iron ore clearing and forward freight volumes. 

SGX clears 90% of global seaborne iron ore derivatives, equivalent to the size of annual physical Chinese imports at 900 million tonnes, and has open interest of more than double that of Dalian Commodity Exchange. 

In May 2015, SGX brought 800 key industry players from 18 countries together in the landmark Singapore Iron Ore Week. SGX also launched Coking Coal derivatives and complementary iron ore derivatives during the period.

In October 2014, SGX launched the first Asian electricity futures market, while its subsidiary the Energy Market Company, which it acquired in November 2014, created the FOB Singapore SLlng benchmark for spot LNG. EMC aims to establish the first Asian physical secondary gas market.

Building on its successful FX suite, SGX launched additional FX futures pairs in October 2014, providing currency risk management tools for Chinese, Japanese and ASEAN currencies. SGX announced in January 2015 a strategic partnership with leading FX platform EBS to allow its users to execute and clear SGX Asian FX futures.

SGX’s INR/USD currency futures recorded a daily turnover of US$1 billion in April 2015, winning a 20% market share from incumbents DGCX and CME within 18 months of their launch.

As Asia’s pioneer clearing house for OTC derivatives, SGX continues to be the only exchange to offer Non-Deliverable IRS in MYR and THB, clearing US$7 billion NDFs and NDIRS during the period and also extended its OTC Derivatives clearing service to client transactions.

SGX is the only Asian clearinghouse granted both DCO recognition by the CFTC (December 2013) and EMIR recognition by ESMA (April 2015), placing it at the forefront of global regulatory standards. In January 2015, SGX received CFTC recognition as a registered FBOT. 

In January 2015, SGX admitted Mizuho Securities USA as Asia’s first remote clearing member, allowing the exchange to support the clearing of trades for US customers covered by Dodd Frank.

The company faces competition as the IntercontinentalExchange opened up its Asian exchange and CCP in Singapore this year with Eurex planning to follow in the coming years. However, its recent pace of growth and innovation will stand it in good stead to fight off the competition and continue its international expansion.