OTC Derivatives and Trading Platforms in Singapore

by Hua Zhang, February 9, 2012
Industry Trends
Asia-Pacific

Abstract

Singapore is already a major trading hub in the world: it is the eighth largest centre for OTC derivatives.

In a new report, OTC Derivatives and Trading Platforms in Singapore, Celent examines the regulation dynamics, market size, trends in the OTC derivatives market, participant trends, electronic trading, and trading platforms. The proportion of e-trading will continue increasing. The electronic trading rate of CDS, IR, and FX will reach 5%, 15%, and 61% respectively in 2013.

According to the G20 agreement, Singapore Exchange will provide clearing services for many derivatives products, such as NDF. Celent expects this to decline further because there will be greater buy side adoption of algorithmic trading and an increase in speeds once SGX Reach comes online. It will make the market move more trading from OTC to exchanges. Over the next couple of years, SGX will expand this to foreign exchange options, IRS in other currencies, nondeliverable swaps, Asian CDS, indices, and Asian single-name CDSs.

“Celent continues to see a lot of players in the regional IRS markets,” says Hua Zhang, analyst with Celent’s Asian Financial Services group and author of the report, “Regional IRS markets are likely to continue to grow in line with the rise of Asia as a major market in the global economy.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Regulatory Dynamics

4

OTC Derivatives Market Size

6

OTC FX Derivatives

7

 

OTC FX Spot

7

 

OTC FX Forwards

9

 

OTC FX Options and NDF

9

 

OTC FX Swaps

10

OTC Participants

12

 

OTC IR Participants

12

 

OTC FX Participants

12

Electronic Trading Level and Trading Platform

15

 

IR and FX Trading Platform in Exchange

16

 

E-Bond Platforms

17

 

MarkitSERV

18

 

MFX Spot-ON

19

Conclusions

20

Leveraging Celent’s Expertise

22

 

Support for Financial Institutions

22

 

Support for Vendors

22

Related Celent Research

23

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