- NDF Matching provides market participants with greater choice in where they execute their NDF foreign exchange contracts
- New offering supports demand for more NDF Central Limit Order Book trading venues in Asia, including from LSEG’s network of over 5,000 FX Trading desktop users in the region
- Cleared settlement brings innovation to the FX market, including simplified credit management, lower costs, and easier adoption by non-bank participants
- Singapore location is optimal for minimising trading latencies across Asia
LSEG (London Stock Exchange Group), the providers of Refinitiv Matching, FXall and ForexClear, today announced the development of NDF Matching, a new fully cleared Non-Deliverable Forwards (NDF) Matching venue in Singapore, supported by the Monetary Authority of Singapore (MAS). According to the Bank for International Settlements’ 2019 triennial FX survey, the average daily volume of NDF transactions jumped from $134 billion in 2016 to $258 billion in 2019, and has continued to develop alongside the growing FX market in Singapore.
This represents the first phase of LSEG’s plans to implement NDF and Spot Matching as well as streaming relationship venues in Asia to meet both the growing demand in the region and increasing electronification of FX trading globally. The integration of clearing into the design of NDF Matching also enables easier access to the full book of liquidity in the venue for all participants. The venue will be open for integration testing later this year, with a full production launch in mid-2023.
The launch of NDF Matching is also the first stage of LSEG re-platforming its FX venues to its core technology. This will provide customers with greater performance and improved functionality, and support increased product innovation.
Lim Cheng Khai, Executive Director of the Financial Markets Development Department, MAS, said:
“LSEG’s decision to launch cleared NDF Matching in Singapore underscores Singapore’s position as a price discovery hub. As a leading inter-dealer platform, LSEG’s venue is a key addition to our FX ecosystem and will play an important role in meeting Asian market players’ growing FX needs.”
Neill Penney, Group Head of FX, LSEG, said:
“As a leading provider of FX and capital markets solutions, there has been strong demand for LSEG to enter the NDF CLOB market as participants look for greater choice in where they execute. Singapore boasts a leading position as an FX hub and we are grateful for the support from MAS as we launch this new initiative. This is the first FX venue to be delivered on LSEG’s leading-edge technology. We look forward to bringing the benefits of this improved technology to our market-leading Spot Matching and FXall venues in future phases of our re-platforming.”
James Pearson, Head of ForexClear, LCH, said:
“ForexClear, and its divisional partners within LSEG, are excited to collaborate with the MAS to launch NDF Matching in Singapore. It exemplifies not only the focus on Asia for LCH, and across LSEG, but also the innovation possible within LSEG to create a trading platform wherein a broader array of market participants can decide on a pre-trade basis to clear their NDFs. Margin savings (driven by UMR), operational efficiencies, and credit intermediation advantages will be a fundamental feature of this industry-first platform, all of which have underpinned the recent rapid growth of ForexClear and NDF clearing. In Q1 2022, ForexClear cleared on average $100 billion of NDFs daily, and we look forward to providing the compelling benefits of FX clearing to more participants as this market continues to grow.”
Singapore is currently ranked the largest FX centre in Asia, and third largest globally according to the Bank for International Settlements’ Triennial Central Bank Survey of Foreign Exchange and Over-the-counter (OTC) Derivatives Markets in 2019. This has been driven by the influx of the world’s leading FX dealers, which have launched electronic trading engines within its SG1 data centre.
LSEG offers the world’s leading independent source of trusted FX market insight, interbank and dealer-to-client electronic trading venues, workflow management, and post-trade and regulatory support for both sell-side and buy-side participants. The Group continues to make additional investments in and enhancements across its global FX offering. In June 2021, LSEG announced that FXall would connect to ForexClear for FX OTC trade clearing, enabling FXall buy-side users to streamline and accelerate access to clearing of FX OTC trades. Developed in partnership with market participants, ForexClear delivers unmatched capital and operational efficiencies, including the flexibility and choice of both US and European clearing models.