LMAX launches NDF trading in Singapore following SG1 matching engine and RMO license

Rick Steves

The introduction of NDF trading, backed by a transparent and efficient CLOB system, is poised to enhance LMAX Exchange Singapore’s market position and offer significant benefits to its clients, especially in terms of foreign exchange risk management.

LMAX Exchange Singapore, part of the LMAX Group, has received a Recognised Market Operator (RMO) license from the Monetary Authority of Singapore (MAS).

This license is a significant step for LMAX Group, as it allows the company to offer Non-Deliverable Forward (NDF) trading in both Singapore and London.

LMAX to offer NDF trading through CLOB system and market data

NDF Trading: The license enables LMAX Exchange Singapore to provide NDF trading. NDFs are financial derivatives used in foreign exchange markets, particularly for hedging purposes against non-convertible currencies.

Central Limit Order Book (CLOB) System: The trading will be facilitated through a CLOB, which is known for ensuring transparent pricing. This system is beneficial for providing increased liquidity and an efficient market structure.

Real-Time Market Data: All participants in the system will have access to real-time market data, enhancing the trading experience and decision-making process.

Focus on Asia Pacific Region: This development is a part of LMAX Group’s strategy to diversify its offerings. It specifically aims to strengthen its presence and services in the Asia Pacific region, recognizing its growing importance in the global financial landscape.

“Transparent price discovery and access to deep institutional liquidity”

David Mercer, CEO of LMAX Group, emphasized the intention to expand their cross-asset product offerings in the region, benefiting local customers and the broader Asia Pacific market. “The Monetary Authority of Singapore is among the most progressive and innovative regulators globally. We look forward to a continued, symbiotic relationship with MAS as we progress our expansion plans and build out our cross-asset product offering in the region for the benefit of local customers and the broader, vibrant, Asia Pacific market.”

Matt DellaRocca, Head of Liquidity and Analytics, APAC, at LMAX Exchange, highlighted the increasing significance of Singapore as a hub for global FX trading and mentioned the ongoing efforts to expand product offerings in response to the growing local demand for transparent price discovery and access to deep institutional liquidity. “As Singapore becomes an increasingly important hub for global FX trading, we are delighted to have the support and recognition from MAS. We continue to expand our product offering to meet growing local demand for transparent price discovery and access to deep institutional liquidity and look forward to strengthening our institutional client relationships across Asia.”

This move indicates LMAX Exchange Singapore’s commitment to catering to the evolving needs of its global clientele, with a particular focus on the dynamic Asia Pacific market.

The RMO license from MAS not only legitimizes the company’s operations in the region but also aligns with Singapore’s growing stature as a global FX trading hub. The introduction of NDF trading, backed by a transparent and efficient CLOB system, is poised to enhance LMAX Exchange Singapore’s market position and offer significant benefits to its clients, especially in terms of foreign exchange risk management.

LMAX launched a new matching engine in Equinix SG1

Securing the RMO license comes on the heels of LMAX’s infrastructure expansion in the Asia Pacific region and the launch of a new matching engine in the Equinix IBX Data Centre in Singapore (SG1).

SG1 is LMAX Group’s fourth matching engine globally, showcasing the company’s ongoing commitment to expanding its international presence.

The engine provides clients with greater access to deep regional institutional liquidity. This access is crucial for effective and efficient trading in the financial markets.

The matching engine offers trading on a CLOB, featuring real-time, firm limit order liquidity from leading global banks and non-bank entities. This setup ensures transparency and competitiveness in pricing.

LMAX Group’s investment in SG1 reinforces its dedication to providing efficient price discovery and consistent, low-latency execution for its global customer base. The firm aims to build a more diversified liquidity pool in the Asia Pacific, recognizing the region’s growing influence in global capital markets.

Since its launch, SG1 has seen significant local traction and has a robust pipeline of institutional customers ready to onboard. These include banks, proprietary trading firms, brokerages, and asset managers. While currently offering spot FX trading, LMAX Group plans to expand its range of products in the Asia Pacific, mirroring its global trading capabilities.

LMAX Group’s presence in Asia Pacific dates back to 2014 with the launch of its Tokyo matching engine (TY3). The company opened its regional hub in Singapore in June 2015. The addition of SG1 to LMAX Group’s infrastructure footprint is a strategic move to enhance regional liquidity and add value to the local financial ecosystem.

The firm envisions establishing an Asia Pacific corridor between its twin hubs (TY3 and SG1). This corridor would further facilitate market access to institutional liquidity.

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