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SGX Launches Trading Hubs in Chicago, London

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by Ernie B. Calucag

Singapore Exchange (SGX) announced Wednesday the launch of trading hubs in Chicago and London as it aims to bring Asian markets closer to global investors.

The hubs are the first by an Asian exchange and will provide customers convenient and cost-effective local connections to SGX markets.

SGX said it expects to begin operating the hubs once pre-trade risk controls at the exchange level in the derivatives market are made available to participants in April. The pre-trade risk controls are in line with the Futures Industry Association’s recommendation for exchange-hosted risk controls.

By connecting to SGX’s hubs, global investors can access the offshore market for Asian equity futures. These include the China A50 futures, the only offshore futures for China’s domestic A-share market.

The international hubs are part of SGX’s S$250-million technology initiative to deliver access to fast-growing Asian economies. Other components of the initiative include Singapore data centre with co-location services and the world’s fastest trading engine Reach.

“Customers coming to SGX’s hubs can access Asia’s biggest and most promising economies at lower cost and greater convenience. Our trading community will benefit from increased opportunities and greater liquidity as we continue to grow our presence in more international financial centres,” said SGX CEO Magnus Bocker.

SGX added it is exploring Hong Kong and Tokyo as the next locations for its hubs.

Separately, the exchange announced a plan to link its data centres with those of Eurex and vice versa so that their customers have easy connectivity to each other’s markets.

“As part of this partnership, Eurex will be moving its existing access point in Singapore into the SGX co-location data centre. In return, Eurex will act as a network service provider to SGX’s customers in Europe,” said the exchange.

This means that Eurex’s co-location customers in Frankfurt can conveniently participate in Asia’s economies and companies via SGX’s securities and derivatives markets. Similarly, SGX’s co-location customers will be able to easily trade in Eurex’s diversified derivatives market if they are Eurex trading members.

The link is expected to start in the middle of this year.