SGX takes steps to meet global clearing standards

PHOTO: SGX takes steps to meet global clearing standards

SINGAPORE - Singapore Exchange Ltd said on Tuesday that it has tightened its risk management systems so it is in line to meet new global regulatory standards and make it easier for US and European banks to continue to be members of its clearing houses.

The exchange said that it has deployed more capital to support its two clearing houses and made its risk management systems more transparent.

As more derivative trades are put through central clearing houses, global regulators have set tough new standards for clearers so they can handle the anticipated heavier demand.

Regulation in the US and Europe means that banks from those countries may not be able to be members of clearing houses that do not meet those standards. Those rules have prompted concerns that banks would have to retreat from some derivative markets in Asia.

The Singapore exchange said it is now going to seek formal recognition from the US Commodity Futures Trading Commission for its derivative exchange and clearing house, which will ensure US banks can continue to be members.

"In meeting the latest global regulatory requirements, we assure our customers that they can continue to efficiently expand their businesses and confidently manage their risks via SGX," said chief executive Magnus Bocker in a statement.

The exchange added that it will also be seeking recognition from the European Securities and Markets Authority in due course.