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First Asian FX Forwards Cleared By SGX

The Singapore Exchange (SGX) has launched its clearing service for over-the-counter traded Asian foreign exchange non deliverable forwards with Deutsche Bank, DBS Bank and OCBC Bank clearing their first Asian FX forwards with the exchange.

SGX’s clearing initiative is aligned with global developments toward central counterparty clearing of OTC derivatives to promote systemic stability in financial markets. The clearing of Asian FX forwards covers non-deliverable Asian currencies, including the Chinese yuan, Indian rupee, Korean won, Indonesian rupiah, Malaysian ringgit, Philippine peso and Taiwanese dollar.

Muthukrishnan Ramaswami, president of SGX, says: “Launched in close collaboration with our members, the Asian FX forwards clearing service will accord our members capital and operational efficiencies. This service is well aligned with global regulatory reform and will encourage the adoption of CCP clearing of OTC traded products in Asia.”

The launch of FX forwards by SGX follows the launch last November of its clearing service for interest rate swaps denominated in Singapore and US dollars (Squawkbox, 27 September 2010).

The 11 SGX clearing members eligible to clear FX forwards are Barclays Bank, Citi, Credit Suisse, DBS Bank, Deutsche Bank, HSBC, OCBC Bank, Standard Chartered, Royal Bank of Scotland, UBS and United Overseas Bank. SGX says it expects the membership to grow with membership interest from all banks active in these products.

Clifford Cheah, Deutsche Bank’s head of global finance and foreign exchange, Asia, says: “Helping our Asia focused clients prepare for significant regulatory changes in FX markets is a key priority for Deutsche Bank. As the world’s largest foreign exchange bank, we are committed to new derivatives clearing initiatives including SGX’s efforts that will make a positive contribution to the transparency and growth of Singapore’s financial markets.”

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