The Singapore Exchange (SGX) has opened a public consultation ahead of the launch of MSCI Indonesian index futures, which it plans to rollout in Q1 2012, subject to regulatory approval.
For new US dollar-denominated futures contract, the SGX will seek comment on issues such as cash settlement options and a proposed position limit of 25,000 contracts net on the same side of the market and in all contract months combined.
SGX says the listing of MSCI Indonesia index futures will offer investors an alternative, on-exchange method of trading the contracts, instead of using the over-the-counter (OTC) market, offering greater transparency and the ability to minimise risk by using central clearing.
The consultation will run until the end of October.
Meanwhile, SGX has also reported the successful launch of its clearing service for OTC traded non-deliverable foreign exchange forwards.
Deutsche Bank, DBS Bank and OCBC Bank were among the first firms to clear their Asian FX forward with the bourse.
The initiative has been developed in line with global reforms to the OTC derivatives market, which, among other new rules, will mandate central clearing for many OTC derivatives.
The clearing of Asian FX forwards covers currencies including Chinese yuan, Indian rupee, Korean won, Indonesian rupiah, Malaysian ringgit, Philippine peso and Taiwanese dollar. The exchange currently has 11 clearing members that are eligible to clear FX forwards, comprising Barclays Bank, Citibank, Credit Suisse, DBS Bank, Deutsche Bank, HSBC, OCBC Bank, Standard Chartered Bank, The Royal Bank of Scotland, UBS, and United Overseas Bank.
“SGX is committed to offer clearing solutions to meet the growing needs of OTC market participants in Asia,” said SGX president Muthukrishnan Ramaswami. “Launched in close collaboration with our members, the Asian FX forwards clearing service will accord our members capital and operational efficiencies. This service is well aligned with global regulatory reform and will encourage the adoption of CCP clearing of OTC traded products in Asia.”?