Singapore Exchange reaches out to Germany
Singapore: reaching out to international market participants
The Singapore Exchange has stepped up its efforts to connect to international market participants, with a deal between itself and German derivatives exchange Eurex that will allow traders in Europe to access the Singapore market more easily.
Earlier this year, Singapore and Malaysia became the first two exchanges in Asia to connect to the ASEAN link, an ambitious project to unite the economies of Southeast Asia through the capital markets. The exchanges of Singapore and Malaysia began trading on the ASEAN link in September, allowing members of both exchanges to trade each other’s markets freely and interchangeably for the first time. Thailand joined the link in October; the exchanges of Indonesia, the Philippines and Vietnam are expected to follow.
Under the latest deal with Eurex, trading members hosted in SGX’s co-location centre can now directly connect to Eurex via a hosted access point, and vice-versa. In effect, market participants in Asia and in Europe will be able to directly access each other’s markets via their local co-location facilities. The aim is to make it easier and cheaper for market participants to access both markets.
The agreement with Eurex underlines efforts by SGX to connect to as many international markets as possible in recent months. In November, the exchange agreed to co-locate NYSE’s SFTI trading network at the exchange. NYSE’s SFTI is a shared infrastructure that allows its users to trade across all the markets it connects without needing to connect to each venue individually. By co-locating at SGX, NYSE effectively allowed the entire community of co-located users at SGX to connect to the SFTI themselves, adding to the potential pool of Asian users.
SGX also has a cross-trade deal with the London Stock Exchange, under which he top 37 companies listed on SGX will become available to trade on the LSE before the end of this year; in return, blue-chip FTSE 100 stocks from the LSE will become available on SGX in the first half of 2013. The idea is to boost liquidity at both exchanges and make it easier for international investors to access each other’s markets.
As with all the exchange’s other agreements, the data centre deal with Eurex covers trading connectivity and market data. Trade matching will still be executed at the respective home exchanges.
“We welcome this cooperation as it extends our reach in Europe and offers our clients another efficient connectivity option to the European markets,” said Tinku Gupta, head of market data and access at SGX.
Meanwhile, Eurex is pursuing its own push into Asia. In October, Eurex announced a 50% fee reduction for Asia Pacific market participants. Due to run for 18 months, the fee reduction cut away at the exchange’s connectivity charges. Asia-based companies that are an affiliate of an existing Eurex member outside Asia were given the same reductions.
The fee cuts at Eurex’s Asian business are also due to be matched with technology improvements. From January 2013, the company will be offering 80 Mbit/s connectivity from its network access points in Hong Kong and Singapore. Previously, the maximum was 2 Mbit/s.
