Singapore Exchange’s long-running plan to establish itself as a multi-asset platform passed a milestone in September when the Asian group unveiled a new management structure geared towards integrating its various businesses.

SGX appointed Lee Beng Hong, formerly head of the group's Fixed Income Currencies and Commodities (FICC) division, as head of wholesale markets and platforms division. Speaking to Global Investor, he described the changes as the natural extension of years of work by the exchange.

“We have brought all our product teams under a new global markets division,” Lee told Global Investor. “Within that, you have all asset classes under one umbrella. The top priority for us now is to further deepen the work that we have done. It really leverages everything that we have built over the last seven years – the new technology services (SaaS), and the platforms that we have brought together. We believe that with this renewed focus we can continue to scale and grow.”

Under the management changes, Michael Syn became president and head of the global markets division that comprises all business lines except indices. The changes, which took effect at the beginning of October, are geared towards driving the next phase of growth at the exchange group.

Lee joined the firm in 2019 from Deutsche Bank to run the consolidated FICC team. Since then, the FX business has gone from strength to strength. As the group presented results in August, SGX’s chief executive lauded the growth of its futures franchise. Loh Boon Chye said the business has grown from six contracts ten years ago to nearly forty today.

And trading volume across SGX’s foreign exchange futures complex rose 61% year-on-year to 4.2 million lots in August, according to monthly figures published by the exchange.

That included 2.8 million contracts in its flagship US dollar/offshore Renminbi future (USD/CNH), which translated to $12 billion (£9.8bn) worth of trades each day.

“We can say that there is a solid growth trend in the segment. In the first two weeks of September, that figure is close to $15bn, representing a steep increase,” said KC Lam, head of FX and rates at the exchange. “Throughout this period, one thing that has been happening is that more people are aware that liquidity is there and price discovery is excellent. As a result, we have had more participants joining in the last three months than the previous quarter, so what we can say is that there are signs that we are really reaching a new threshold in terms of the futures franchise.”

That progress positions SGX to compete with the much larger over-the-counter (OTC) market dominated by dealer banks.

“Within the OTC space, Asian currencies typically have better liquidity within Asian hours, the challenge is that once you move away from that window it dwindles,” Lee added.

“Having a transparent 22.5 hours continuous market on CNH futures actually facilitates that globalisation process because you have a reference that is liquid and lit. The liquidity profile for futures continues to be healthy after the Asian hours which reflects the internationalisation of that market.

“At 12 yards a day, we are probably comparable to most of the OTC marketplaces. Within that, one of the key drivers has been increasing participation in the futures market from both international and regional banks. That reflects the growing importance of futures as a source of liquidity and price discovery.”

Beyond futures, the firm has been hard at work expanding the breadth of its FX offering through a series of launches and acquisitions.

SGX in 2021 reached agreement to acquire foreign exchange trading platform MaxxTrader from fintech firm FlexTrade Systems for $125 million, and rolled out its FX ECN in November of that year.

The exchange also acquired BidFX in July 2020, and launched a non-deliverable forward matching service on its CurrencyNode venue in September last year, adding to the venue’s FX spot and precious metals offering. The integration of those lines is core to the exchange’s vision for the new FX business.

To be continued on October 18