JP Morgan to bring e-FX trading and pricing engine to Singapore

JP Morgan has said it plans to launch a fourth electronic foreign exchange trading and pricing engine in Singapore early next year, with support from the Monetary Authority of Singapore.

In its August 29 announcement, the US bank argued the move will improve client experience through reduced latency in trade execution and greater price transparency.

“With electronic FX trading set to grow in the region, Singapore will benefit from the flows and we see this initiative consolidating Singapore’s position as Asia’s leading FX trading centre,” says Sudhanshu Sanadhya, head of Asia currencies and emerging markets trading at JP Morgan.

JP Morgan currently has similar platforms in London, New York and Tokyo. It is the latest among a number of global banks and electronic communication networks to announce that they intend to anchor such operations in the city-state.

MAS has been encouraging liquidity providers and market-makers to set up shop on the island by covering part of their software costs. The move is part of the central bank’s strategic initiative to develop Singapore into a global price-discovery and liquidity centre for FX during trading hours in Asia.

Matching engines belonging to UBS and XTX are already operating on the island. Systems from Citi, FastMatch, Jump Trading and Standard Chartered are expected to become operational in the coming months.

A number of top-tier global players are building out their electronic trading and pricing engines here, which is [a] strong validation and endorsement of Singapore as a global foreign exchange centre

Gillian Tan, Monetary Authority of Singapore

The case to establish a strong footing in Singapore is increasing. As of April, Singapore averaged $585 billion in daily FX turnover, 15% more transactions than recorded in October 2018 – making the city-state the third-largest FX trading centre behind London and New York.

Gillian Tan, executive director for the financial markets development department at MAS, welcomed JP Morgan’s decision to launch its electronic FX trading and pricing engine in Singapore, calling it a boost for the island and Asia’s foreign exchange market.

“A number of top-tier global players are building out their electronic trading and pricing engines here, which is [a] strong validation and endorsement of Singapore as a global foreign exchange centre,” Tan says.

“With the growth in Asia’s foreign exchange trading needs and increasing demand for more efficient price discovery in the Asian time zone, regional market participants will benefit from better connectivity and latency, as well as enhanced pricing and trade execution in the Singapore foreign exchange electronic trading ecosystem,” she adds.