The Singapore Exchange (SGX) has announced that it has started clearing non-deliverable interest rate swaps in Malaysian ringgit and Thai baht from 7 April 2014.
Both will be settled in US dollars. They add to SGX’s current OTC clearing arrangements for interest rate swaps in Singapore and US dollars together with non-deliverable forwards denominated in seven Asian currencies.
Singapore, being a qualified central counterparty, means that customers who clear non-deliverable interest rate swaps trades via the SGX platform, benefit from lower capital requirements for their trades and default fund exposures as per the Basel III framework.
Michael Syn, the head of derivatives at SGX said that the exchange would continue to expand its Asia-based offerings and grow its pool of membership. He added that non-deliverable interest rate swaps in Malaysian ringgit and Thai baht were being actively traded in the region and SGX’s clearance of them would help counterparty and operational risk management.