Since launching its initial suite of FX products four years ago, SGX has reported consistent growth in this business segment. But can the exchange sustain the momentum going forward? Galen Stops takes a look.
Back in November 2013, Singapore Exchange (SGX) went live with trading for six deliverable and non-deliverable currency pairs: AUD/USD, AUD/JPY, USD/SGD, INR/USD, KRW/USD and KRW/JPY. As Profit & Loss noted at the time, the aim was clearly to establish SGX as the major hub for Asian currency futures trading.
Fast forward four years and it appears that the exchange is well on its way to achieving this ambition, with the star performers in its FX suite being the INR/USD and USD/CNH contracts, the latter of which was launched in 2014.
Justin Slaughter, a partner at Mercury Strategies, warns that US regulators are examining if they need to take further action around algorithmic trading.
Talking about how the Commodity Futures Trading Commission (CFTC) has not necessarily given up on “Reg AT”, which included a controversial provision that trading firms hand over potentially proprietary source code related to trading to the regulator, Slaughter highlighted broader questions about what data regulators should have access to.
“What should the government do to make sure that we have access in an emergency to critical data but not give it so much access that we’re then in danger of leaking our critical proprietary knowledge?” he says.
My second Irrational award is an old favourite – the Regulator of the Year – however it has to be whispered that the ammunition isn’t quite there in the quantity it used to be. The CFTC in particular, which has always been a favourite hunting ground for this column, has become particularly sensible since the change of leadership when discussing the appropriate level of market regulation. Thankfully, there are, however, still moments when regulators do something that makes you scratch your chin.
At the moment it seems as though literally half the people that I’m speaking to just want to talk about bitcoin, while the other half just want to complain that no one wants to talk about anything except bitcoin.
But all this hype actually could cause problems for bitcoin going forward. For one thing, speaking to the exchanges and other mainstream financial services firms about why they’re launching bitcoin products, the answer is invariably some version of “well there’s tons of client demand for exposure to bitcoin”.