Connecting the World to Opportunity Through Asia

Asia boasts tremendous opportunities. To empower investors to make the most of them, SGX Group offers unparalleled access to the region’s growth potential through equity derivatives, commodities, FX, fixed income, securities and indices—all through a tightly knit ecosystem that ensures ample liquidity and a superior experience.

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“While we are a Singapore-anchored platform, we are uniquely interoperable with the US marketplace, the European marketplace, as well as the Asian marketplace,” says Michael Syn, Head of Equities, SGX Group. “This isn't something you could say for the other platforms. If you want to risk-manage your exposure to individual countries, equities or currencies, you need to do it on a time-tested, trustworthy platform.”

Chinese markets, for instance, are too big for global investors to ignore. One way that SGX Group empowers investors to tap into Chinese stocks is through SGX FTSE China A50 Futures—offering international participants access to an index of the 50 largest mainland-listed companies. Today, SGX accounts for around 95% of futures contract volume,^[1] outpacing competitors due to its strong ecosystem and unparalleled ability to provide liquidity.

SGX Group brings that same excellence to FX, where it’s building a leading integrated platform to bridge the OTC and futures spaces—unsurprising given Singapore’s position as the world’s third-largest FX hub.^[2] Last year, for instance, it acquired the sell-side focused FX pricing and risk solutions provider MaxxTrader, bringing it one step closer to realizing its vision.^[3]

“We are unique in that we are one of the few venues in the world that provides seamless FX risk-management solutions,” says Lee Beng Hong, Head of FICC, SGX Group. “Our trading platform can customize workflow technology for both the buy and sell side, allowing them to tap into liquidity from listed futures and OTC markets. No one offers what we offer.”

In September 2021, SGX Group launched its FX electronic communication network, SGX CurrencyNode. This offers market participants such as global banks, brokers and institutional investors access to multiple sources of OTC FX liquidity anonymously through a single venue.

“Our goal is to create a best-in-class FX marketplace that elevates participants’ access to both OTC and listed futures, aggregating liquidity and serving all their currency hedging and trading needs with efficiency and liquidity,” Lee says.

Innovative Collaboration

Delivering against emerging needs and requests often requires collaboration. To that end, SGX Group establishes powerful growth partnerships to build scale and elevate its service offerings.

Among recent examples is the NSE IFSC-SGX Connect. Launched in July, this partnership with the National Stock Exchange of India presents an innovative pathway for international investors to participate in India’s growth story.^[4] Through SGX Group’s unique trading infrastructure in Gujarat International Finance Tec-City (GIFT City), investors in India and around the world can trade Nifty contracts listed on NSE IFSC seamlessly and efficiently with global risk-management and clearing standards. Investors also have real-time access to NSE IFSC market data.

SGX Group brings that same innovative approach to commodities, last year striking a partnership with New Zealand’s Exchange (NZX) to launch a suite of global dairy derivatives.^[5] The partnership combines the complementary capabilities of the NZX and SGX to scale up market distribution and liquidity in the global dairy derivatives markets. In turn, participants better manage price risks in international dairy markets, which are notorious for their volatility.^[6]

Investors are engaging in droves. Since launch in November 2021, daily trading volume has increased by 50%, while open interest has doubled.

A third example comes in the form of Marketnode—a digital asset joint venture by SGX Group and Temasek. Marketnode uses technologies such as smart contracts and distributed ledger technology (DLT) to develop an end-to-end digital markets infrastructure, including an industry-wide utility for mutual funds to reduce settlement times and costs. The joint venture reflects SGX Group’s commitment to embracing technology in an increasingly digital world.

“Marketnode is going to execute a large part of our digital asset strategy,” says Lee. “There are three components of end-to-end digitalization: the asset creation process, setting up the right infrastructure to record asset ownership and to provide lifecycle service, and building a smart way to distribute the ownership. Marketnode plays across the spectrum to bring traditional finance into the digital asset space.”

Sustainability at the Core

As finance and sustainability become inseparable, SGX Group uses its expertise to develop sustainability-related products and services for customers’ investment and risk management needs. Its regulation arm, Singapore Exchange Regulation (SGX RegCo) is uniquely positioned to support SGX-listed companies on their sustainability reporting journey, with guidance and recommendations, in line with international frameworks and standards.

One example comes in the form of SGX ESGenome—a digital disclosure portal for companies to streamline sustainability reporting and enhance investor access to consistent and comparable ESG data. Launched in September in partnership with the Monetary Authority of Singapore (MAS), ESGenome aims to solve the data challenge in ESG reporting on a collective basis for both publicly listed and private companies.

“This is a comprehensive platform that allows listed companies to log the indicators that are relevant to them, including a core set of 27 ESG indicators,” Syn says. “We've made it easy for them to use this platform. And we're encouraging them to do this because it automatically generates their sustainability report, which saves them work.

“Secondly, it's mapped to global standards on disclosure covering over 3,000 ESG metrics. We're trying to make it easy for everyone to use the standardized platform to collect data, and for investors to access this data for investment decisions.”

While SGX Group puts sustainability at the core of everything it does, its ecosystem is built on foundations of trust and safety. Singapore is the only AAA-rated jurisdiction in Asia. In turn, the ecosystem serves as a flight-to-quality and flight-to-usage venue.

“There’s one thing that we never take for granted but that we don’t say often enough which is that Singapore is a flight-to-quality jurisdiction,” Syn adds. “Every crisis, we’ve seen flight-to-quality flows come into our exchange. We operate our infrastructure to those standards. You can say anything you want about the other exchanges, but I don’t think anyone will provide the same sense of quality, security and reassurance as we do.”

[1] Bloomberg [2] MAS [3] SGX [4] SGX [5] NZX [6] NZX