The Singapore Exchange (SGX) has started a consultation process with the market on the introduction of a new remote membership class.
Such a membership would enable futures commission merchants registered with the US Commodity Futures Trading Commission (CFTC) to clear swaps for existing and new US customers through SGX Derivatives Clearing.
The move by SGX follows regulatory changes in the US under the Dodd-Frank Act. It requires US customers clearing swaps to perform it through a clearing house registered with the CFTC as a derivatives clearing organisation and through clearing members who are futures commission merchants.
SGX Derivatives Clearing has applied to the CFTC for registration as a derivatives clearing organisation. This new remote membership class will enable SGX Derivatives Clearing to admit futures commission merchants as clearing members and to clear swaps for their customers.
This current plan is designed to cater to US regulatory requirements. SGX Derivatives Clearing says that it may admit members of other jurisdictions as remote clearing members in the future. In addition, SGX Derivatives Clearing and SGX’s securities depository, the Central Depository, have also applied under European regulations to conduct their clearing businesses in the European Union.