Singapore Exchange (SGX) has launched the clearing of Non-Deliverable Interest Rate Swaps (NDIRS) in Malaysian Ringgit and Thai Baht on 7 April 2014.
This new asset class, which will be settled in US dollars, further augments SGX’s current suite of Over-the-Counter (OTC) Financials clearing which includes Interest Rate Swaps (IRS) in Singapore Dollar and US Dollar and Non-Deliverable Forwards (NDF) in seven Asian currencies.
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In today’s volatile environment, customers can take advantage of the clearing services and straight-through-processing by SGX to mitigate their counterparty and operational risks.
As a Qualified Central Counterparty (QCCP), SGX offers its customers, who clear NDIRS trades via the SGX platform, lower capital requirements for their trades and default fund exposures as stated under the Basel III framework. Customers are assured of direct access to transparent clearing services, greater operational efficiency and cost-savings on SGX.
Valerian Crasto, COO, DBS Treasury & Markets, said: "The expansion of SGX’s clearing service is beneficial to the industry especially in light of the increasing global OTC derivatives regulatory reforms. DBS looks forward to clearing our NDIRS trades at SGX."
Teh Yeong Chuan, global head of Rates, Standard Chartered Bank, said: "This first-of-its-kind ability to clear Malaysian ringgit and Thai baht NDIRS is a great development. Like all market participants, Standard Chartered welcomes this initiative and we look forward to being an active clearing member in this new product set."
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By GlobalDataMichael Syn, head of Derivatives, SGX, said: "NDIRS products in MYR and THB are actively traded in Singapore and the region. Clearing of these products will address customers’ need for secure and efficient risk management solutions to better manage their counterparty and operational risks. SGX will continue to expand its Asia-based offerings and grow our pool of membership to provide customers with more options to manage their portfolios in Asia."
