LMAX Group, a leading independent operator of institutional FX trading venues, has announced the launch of FX Non-Deliverable Forwards (NDFs) trading on its central limit order book.

The initiative aims to cater to the growing demand for FX NDF trading in the Asia Pacific region, where institutional liquidity is deepening, and market structure enhancements are underway.

Asia's NDF Trading Dominance

According to LMAX Group, Singapore holds significant importance in their expansion strategy, considering Asia's prominence in NDF trading. Three out of the top four NDF currencies globally are from the Asia Pacific region.

Globally, the trading volume in NDFs has witnessed a notable surge, nearly doubling between 2016 and 2022, reaching $266 billion. This growth is attributed to the increased electronification of NDF markets and the rising number of market participants.

David Mercer, CEO, LMAX Group, said: “As demand for institutional liquidity for Asian currencies continues to grow, adding NDFs to our global FX offering is a logical next step following the launch of our matching engine in SG1 in 2022."

"We recognise the significant potential that remains untapped in the Asian FX market and will continue to broaden our product suite, expand our distribution capabilities globally, and build the leading institutional FX marketplace.”

NDF Trading via Singapore and London Platforms

Initially, FX NDF trading on LMAX Exchange will focus on top Asian USD crosses, including Indian Rupee South Korean Won, New Taiwan Dollar, Chinese Yuan, Indonesian Rupiah, Philippine Peso, and Malaysian Ringgit.

Additionally, Latin American crosses are expected to be included in the offering in subsequent phases. Trading will be facilitated via LMAX Exchange's platforms in Singapore and London.

Matt DellaRocca, Head of Liquidity and Analytics, APAC, LMAX Exchange, added: “We are delighted to go live with this offering, which will provide local FX market participants with access to an expanded pool of NDF liquidity through a regulated exchange venue and a CLOB model that delivers efficient market structure and transparent, precise, consistent execution.”