US investment bank Citi is taking its FX pricing and trading engine to Singapore with backing from the country’s regulator, the institution recently confirmed.
Citi’s trading engine was developed in-house and the bank has already launched the platform in London, New York and Tokyo, with Singapore being the fourth country it will distribute prices to clients.
The Monetary Authority in Singapore (MAS) expressed its support for the FX pricing and trading engine as a significant boost in the development of Singapore as an Asia liquidity hub.
“Most of the market participants have located their Asian FX trading and dealing teams in Singapore, and a Singapore-based FX e-trading ecosystem will better support price discovery and efficient trade execution during Asian trading hours,” Alan Yeo, head of financial markets development at MAS, commented.
The platform includes proprietary pricing and a hedging algorithm, and will initially offer trading in 23 spot currencies as well as two precious metals. Citi expects the platform to launch in Singapore at some point during the fourth quarter this year.
“Citi has a long-standing and successful FX hub in Singapore, and this partnership with the MAS only re-affirms our long-term commitment to the country and the region,” said Itay Tuchman, global head of FX trading at Citi. “As one of the first liquidity providers to build an electronic FX trading engine in Singapore, we look forward to growing the FX trading ecosystem, particularly as the growth of electronic trading accelerates for both spot and NDF currencies.”
Last year, Swiss investment bank UBS launched a similar initiative with MAS and announced plans to launch its own FX pricing and trading engine in Singapore. Similar to Citi, UBS said that the move would improve liquidity and provide further efficiencies for FX markets in Asia. UBS’ platform was slated to launch by the middle of this year.
Citi’s Asia Pacific head of markets and securities services, Stuart Staley, concluded that the expansion of its FX trading engine will also see significant improvement in latency for clients in Singapore and across Asia Pacific, who historically would connect via Tokyo or one of the trading engines outside of the region.
“With Asia Pacific expected to attract a larger share of global investment flows, this initiative will improve price transparency and facilitate more efficient price discovery in the region’s time zone,” he said.