Singapore is the third largest FX centre globally after London and New York, and is the largest in Asia Pacific. Everyday, over half a trillion US dollars of FX is traded in Singapore. The FX sector is pivotal to Singapore's standing as a major trading and corporate treasury hub in the region, and underpins the vibrancy of Singapore's international financial centre.
With all of the top five global banks housing their regional FX sales and trading teams here, Singapore offers a deep and liquid market for the trading and hedging of G10 currencies, as well as Asian emerging market currencies.
As a major FX centre globally, MAS is keen to develop Singapore's FX market to serve the growing trading and hedging needs in the region. To this end, MAS is working with market participants such as banks and trading platforms to build up Singapore's e-trading infrastructure. This will improve price discovery and FX trade execution in the region, and market participants will benefit from better latency, pricing and liquidity in FX and OTC derivatives trading.
Besides Singapore's strength in OTC derivatives globally, our exchanges also offer a comprehensive suite of exchange-traded FX futures and options contracts to complement the OTC market in offering more hedging products and solutions to market participants.
MAS has expanded the scope of the Securities and Futures Act to include OTC derivatives in 2018. Dealing in capital markets products, including securities, units in a collective investment scheme, exchange-traded derivatives contracts, OTC derivatives contracts and spot foreign exchange contracts for the purposes of leveraged foreign exchange trading, is a regulated activity under the Securities and Futures Act, and financial institutions conducting this activity in Singapore will need to apply for the Capital Markets Services (“CMS”) license. Interested parties can access the following link to the CMS license guidelines and application form.
MAS regulates market operators or venues under two categories – Approved Exchanges (“AE”) and Recognised Market Operators (“RMO”). Systematically-important market operators are regulated as AEs and are subject to a higher level of statutory obligations, while other market operators are regulated as RMOs. Interested parties can refer to the below links for the application forms to operate in Singapore’s market.
FX and OTC derivatives trading volume:
Exchange-traded derivatives trading volume:
We are positioning Singapore as the global FX price discovery and liquidity centre in the Asian time zone, and growing the e-trading ecosystem here to enhance support for our investor base and growth of Asian FX markets. This is a strategic development outlined in MAS’ Financial Services Industry Transformation Map (“ITM”), rolled out in Oct 2017.
MAS supports first movers in primary inter-dealer platforms, multi-dealer platforms and liquidity providers to set up matching and pricing/ trading engines in Singapore.
MAS works closely with tripartite partners to build a pipeline of finance professionals and leaders.
Singapore retained its position as the third largest FX centre in the world, after the UK and the US, with its share of global FX volumes rising to 9.5% in April 2022, from 7.7% in April 2019. FX average daily trading volumes rose to US$929 billion in April 2022, increasing by 45% from April 2019.
At the launch of the Financial Services Industry Transformation Map 2025, Mr Lawrence Wong, Deputy Prime Minister and Minister for Finance, and Deputy Chairman, MAS shared the plans, strategies and targets for the next five years for our financial centre to continue to stay relevant and competitive.
The Financial Services Industry Transformation Map 2025 lays out the growth strategies to further develop Singapore as a leading international financial centre in Asia – to connect global markets, support Asia’s development, and serve Singapore’s economy.
In his fireside chat at ACI Live Aid: Financial Markets Give Back, Mr Ravi Menon, Managing Director, MAS, spoke on the operational resilience of the financial sector, FX trading in Singapore, upskilling the industry workforce, and new opportunities for financial services.
Bank Indonesia and MAS announced the extension of the USD10 billion bilateral financial arrangement for another year. The arrangement was established in November 2018 to enable the two central banks to access foreign currency liquidity from each other, if needed, to preserve monetary and financial stability.
