Foreign Exchange & Derivatives

Asia Pacific’s top foreign exchange and derivatives market continually evolves new capabilities to allow greater efficiencies.

Overview

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. 

Key Facts

We aim for Singapore to be the e-trading ecosystem in the region. We are encouraging and working with key FX players and platforms to anchor their e-trading facilities, matching and pricing engines in Singapore.
- Jacqueline Loh, Deputy Managing Director, MAS

Regulations and Guidance

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. 

Initiatives

Focus Areas

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.

Jobs and Training

MAS works closely with tripartite partners to build a pipeline of finance professionals and leaders.