The Singapore Exchange (SGX) is consulting the market on the potential launch of four new foreign exchange futures contracts, ahead of a prospective Q3 launch.
SGX wants to launch US dollar/Singapore dollar, Indian rupee/US dollar, Australian dollar/US dollar and Australian dollar/Japanese yen contract pairs. The futures contracts will be cash-settled and traded and cleared by SGX.
The bourse consultation focuses on four areas.
These include position limits, with an initial proposal of 10,000 contracts net on the same side of the market and in all contract months combined and price limits, which will not be mandated to allow price movements in response to market developments and information.
SGX will also ask for opinions on the termination of trading, with the last trading day for FX futures contracts set two business days prior to the third Wednesday of the contract expiry month – except for the Indian rupee/US dollar futures, which will be set at two business days prior to the last business day of the contract expiry month and final settlement price, settled in cash based on proven and widely-accepted methodology.
Market participants have until 16 April to respond to the exchange’s proposals.