SGX Becomes Authorized By CFTC as First Asian Derivatives Clearing Organization

Following its receiving of approval from the CFTC on Friday, the Singapore Exchange (SGX) has announced that it has become the first Asian firm to become authorized by a US regulator derivatives regulator as a derivatives clearing organization (DCO). Under the authorization, new and existing US customers will be able to clear derivative contracts through the SGX’s derivative clearing unit. The exchange also announced that SGX members who are not registered with the CFTC as future commission merchants (FCM) will be allowed to continue clearing with the SGX for US customers until March 31st, 2014, following the release of a ‘no action relief’ letter granted by the CFTC.

In its public press release about the news, the SGX also stated that it is working with ESMA to have its clearing unit approved by European regulators to act as a “third country central counterparties under the European Market Infrastructure Regulation in order to continue providing clearing services to European Union customers.” Overall, the news follows a trend of which Singapore has become arguably Asia’s leading financial center as a Bridge Bridge The bridge or liquidity bridge is an essential component for brokers that are enabling their clients to trade at interbank rates directly via a Prime Broker or a Prime-of-Prime (PoP). While market makers do not require a bridge in order to service their clients, brokers which are sending through orders to a liquidity provider or an electronic execution venue need a bridge to connect their trading platform to the interbank market.Bridges are used extensively in forex trading, specifically for Met The bridge or liquidity bridge is an essential component for brokers that are enabling their clients to trade at interbank rates directly via a Prime Broker or a Prime-of-Prime (PoP). While market makers do not require a bridge in order to service their clients, brokers which are sending through orders to a liquidity provider or an electronic execution venue need a bridge to connect their trading platform to the interbank market.Bridges are used extensively in forex trading, specifically for Met Read this Term between Eastern and Western markets.

Commenting on the news, Muthukrishnan Ramaswami, President of SGX stated in the company’s release that: “SGX is delighted to be recognised as Asia's first Derivatives Clearing Organization. This reaffirms our commitment to serve our US customers with the necessary regulatory authorisation. It also underscores our position as a leading exchange with the highest international standards and practices which clients can rely on for their business and Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term needs.”