The Australian Securities Exchange (ASX) and the Singapore Exchange (SGX) have established a new connectivity arrangement following the failure of their attempted merger last year.
Each bourse will establish a presence in the other’s co-location data centre.
SGX will host ASX’s hub from September, letting customers located at the Singapore market’s co-location centre trade directly on the ASX 24 futures market based in Sydney.
ASX already provides direct connectivity to its market from Chicago, New York, London and Hong Kong, and already has an existing hub in Singapore. About 6% of ASX 24 futures and options volume is generated from its international hub network.
The next stage of the agreement will let ASX members located in the exchange’s Australian Liquidity Centre connect directly to SGX’s derivatives segment, which is the only international venue to offer Chinese and Indonesia futures contracts.
"This new SGX-ASX partnership enables both exchanges' customers to easily leverage the strengths of the Australian and Singapore derivatives markets,” said Muthukrishnan Ramaswami, president, SGX. “As the Asian Gateway, SGX is delighted to enable easier and more cost effective connectivity offerings at a time when investors are increasingly using exchange-traded derivatives to manage risks in the various global marketplaces."
"The establishment of an ASX futures hub in the SGX facility bolsters the global distribution network for ASX 24, connecting more customers into the Australian market and enhancing our presence in Asia,” added Peter Hiom, deputy CEO at ASX.
An attempted merger between the ASX and SGX, which at the time would have created the fifth-largest bourse in the world by market capitalisation, was thwarted by Australian Treasurer Wayne Swan in April last year because of national interest issues. The SGX is rumoured to be exploring a tie-up with the London Stock Exchange after they signed an agreement on 11 July that would allow members of both to trade stocks on both markets from one location.