SGX and KRX to explore OTC Clearing Collaboration

12/03/2013

Singapore Exchange (SGX) and Korea Exchange (KRX) have signed a Memorandum of Understanding (MOU) to jointly explore collaborations in the development of over-the-counter (OTC) financial derivatives clearing capabilities.

SGX, Asia’s first central counterparty for OTC trades, began clearing OTC financial derivatives in November 2010. It has cleared close to US$300 billion notional of OTC financial derivatives including interest rate swaps and non-deliverable Asian foreign exchange forwards.

Korea Exchange operates a centralised securities and derivatives market where derivatives, stocks, and bonds are traded on a common platform. Its flagship KOSPI200 futures and options have been the most actively-traded derivatives products in the world. As part of KRX’s globalization initiative, the exchange will begin clearing OTC derivatives in the middle of this year.

“KRX, one of the world’s leading derivatives exchanges, looks forward to the development of this partnership with SGX, Asia’s leading clearing house. This collaboration will explore possible synergies to better meet the needs of market participants, particularly in the Singapore and Korea markets. International awareness of Korea and Singapore OTC derivatives markets will grow, thereby helping us to increase participation levels,” said Mr Ho-Chul Lee, President and COO of KRX.

“Clearing through a central counterparty is becoming a necessity for OTC market participants. As Asia’s leading and pioneer OTC clearer, SGX is committed to supporting our customers’ business expansion and risk management with new products, services and partnerships. We are pleased to join KRX in exploring opportunities to serve OTC participants in both our markets better,” said Mr Muthukrishnan Ramaswami, President of SGX.