Wednesday, January 09, 2013 7:15:45 AM

SGX shows derivatives strength in 2012

The Singapore Exchange (SGX) has continued to strengthen its derivatives business with annual volumes in 2012 reaching a new high of 80.2 million contracts, up 11% year-on-year.

Daily average volume also grew 11% to a new high of 326,595 contracts.

In December, derivatives volumes were up 55% from a year earlier at 8.0 million contracts. Daily average volume last month grew 67% to a record-high 402,920 contracts.

The bourse's newer derivative contracts continued to gain traction, registering strong growth in December and throughout the year. China A50 futures volumes tripled in 2012 to 10 million contracts, while Nikkei Dividend Index futures trading more than doubled in 2012 to 152,554 contracts. Indian Nifty futures contracts volumes last year reached a new high 14.7 million contracts, up 0.3%.

The exchange is continuing to focus on making derivatives trading easier. This week it announced it was broadening clearing services for OTC customers. From 25 February, SGX AsiaClear will offer a suite of futures contracts called AsiaClear Futures, starting with iron ore, freight and oil, which is fully fungible with bilateral swaps currently cleared by the exchange.

International customers, including US customers, will be able to meet their risk management needs with swaps and/or futures in SGX AsiaClear.

"SGX AsiaClear intends to expand its clearing services from the current commodity and financial products to Asian OTC equity derivatives as customer needs develop," the company said in a statement.

SGX implements new risk and capital standards

SGX also announced it was on track to meet new international regulatory and risk management standards set by the International Organisation of Securities Commissions (IOSCO) and the Committee on Payment and Settlement Systems (CPSS). The standards were unveiled last April. SGX said in line with requirements, it had reviewed and "sharpened" its risk management and operational processes, as well as adding new rules and procedures to enhance the safety and efficiency of its subsidiaries.

SGX said it will by the end of this month, observe all the new principles, making it among the first exchanges and clearing houses globally to meet these standards.

Bruce Love +44 (0)20 7397 3818