UOB Joins Global Banks to Launch FX Pricing Engine in Singapore

United Overseas Bank Limited (UOB) announced on Monday that it will build an electronic foreign exchange (FX) pricing engine in Singapore to deliver low-latency execution for its clients.

The launch is in line with the plans of the Monetary Authority of Singapore (MAS) to develop the country as Asia Pacific’s FX trading hub. The nation’s markets regulator already supports several initiatives from different global banks who are in the midst of establishing their FX e-trading and pricing engines in the city-state.

The multinational banking organization, headquartered in Singapore, said the first clients are scheduled to be live in the second quarter of 2021. Founded in 1935, UOB is the third largest bank in Southeast Asia by total assets.

"UOB will take advantage of reduced latency via co-location connectivity to improve price discovery and to enhance pricing capability. This will enable the bank's clients to tap the available market Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term with greater efficiency," the bank said.

Demand for FX in Singapore on the Rise

Not only UOB is launching its forex exchange pricing engine in Singapore next year, but also European tier-1 banks such as Goldman Sachs and Barclays are also planning on introducing its own pricing engine in the country.

Earlier in September, Deutsche Bank separately announced that it will be launching its new FX trading and pricing engine in Singapore in Q1 of 2021, under Germany’s biggest bank's push to strengthen its FX presence in the Asia-Pacific.

In June, BNY Mellon was the first bank to announce it is building a pricing and trading engine for sophisticated FX instruments in Singapore, which is part of an initiative with the MAS.

Standard Chartered is also gearing up to launch an e-trading engine by the first quarter of 2020. The new engine will offer e-FX trading of 50 currencies in spot, forward, swaps, non-deliverable forwards (NDFs) and options, as well as commodities e-trading for both precious and base metals.

Singapore is a key trading centre for Western banks, which have seen its e-FX trading volumes grow by double-digits over the last five years.

Lim Cheng Khai, executive director of the financial markets development department at MAS, said: "UOB's establishment of its FX pricing and matching engine in Singapore, alongside the strong pool of global FX Liquidity Providers Liquidity Providers A liquidity provider (LP) constitutes an individual and/or an institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profit on A liquidity provider (LP) constitutes an individual and/or an institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profit on Read this Term here, marks another important milestone in Singapore's role as the global FX price discovery and liquidity centre in the Asian time zone."