ICE acquires Singapore Mercantile Exchange and clearing house
ICE has established a presence in Asia via Singapore (pictured) with SMX
IntercontinentalExchange is to acquire Singapore Mercantile Exchange, including the venue’s clearing house, in a deal that will give it a foothold in Asia for the first time. SMX offers futures for metals, currencies, energy and agricultural commodities.
ICE is the owner of NYSE Euronext, having completed the acquisition of the platform earlier this month. The new owner has said that there will be a period of “business transition” in Singapore in which it will make technology changes and evaluate the product and clearing strategy of SMX. That means SMX and SMXCC will move from their existing technology to the ICE trading and clearing platforms. The venue will continue to operate as a separate entity with its own board of directors.
ICE said that it had chosen Singapore because the city is a regional hub for Asian physical commodity trading. While it hasn’t committed to any newq products yet, ICE said that it was looking at the opportunities for new cleared contracts in both commodities and financial derivatives – a move that would bring it into direct competition with the Singapore Exchange, which runs both the equity market and a financial derivatives market.
“The acquisition of SMX represents an important step in ICE’s growth trajectory as we look to expand our customer base and markets in Asia by establishing a local exchange and clearing presence,” said David Goone, chief strategy officer at ICE. “In recent years, Asia-based trading activity in our benchmark energy and interest rate products has been rising as the region increases in importance in global markets. ICE has had a presence in Singapore for over a decade and today’s announcement is a natural evolution of our strategy to further extend our network of markets across the globe.”
Other pieces of the ICE empire include trading venues and clearing houses in North America, Europe, the UK, Canada and Brazil. Its 100% acquisition of SMX, including the SMX Clearing Corporation, is expected to close by the end of 2013 subject to regulatory approval.
