The Singapore Exchange (SGX) has launched a clearing service for over-the-counter derivatives (OTC) contracts in conjunction with nine investment banks.
The new service will start by clearing interest rate swaps. The banks involved initially are Barclays Bank, Citibank, DBS Bank, Deutsche Bank, HSBC, Oversea Chinese Banking Corporation, Royal Bank of Scotland, Standard Chartered Bank and United Overseas Bank.
“The launch of this new clearing service is a significant milestone for the financial services industry in Singapore,” said SGX president Muthukrishnan Ramaswami. “A first of its kind in Asia, the service provides clearing members with access to SGX's central counterparty clearing service, reducing counterparty risk and enabling growth in OTC derivatives activities. We thank the banks in the SGX-OTC Committee for their contributions over the past two years in developing this service.”
At the end of October, SGX signed a merger agreement with the Australian Securities Exchange. If approved by regulators, the deal could create the fifth largest exchange by market capitalisation in the world.