SGX to launch Asia’s first total return futures
08 April 2019 Singapore
Image: Shutterstock
Singapore Exchange (SGX) is launching Asia’s first total return futures (TRF), as it continues to pivot towards futurised derivatives, effective 13 May.
The new futures solution further expands SGX’s suite of risk-management tools that meet increasing market demand for new trading instruments.
According to SGX, the TRF, with contract months listed up to 10 years, will also allow investors to trade a particular financing cost, the implied equity repo, for the first time.
The exchange explained that Japan has the largest and most mature securities borrowing and lending market in Asia.
It suggested that it has grown into one of the biggest markets for structured products against a low-yield environment.
SGX noted that they are driving futurisation in derivatives in response to client demand to mitigate pressures on capital, collateral and balance sheets, following Basel III and bilateral margining rules for uncleared OTC contracts.
Michael Syn, head of derivatives at SGX, commented: “We are launching a solution that perfectly meets our market participants’ needs for trading opportunities with increased transparency and less risk. This is the first product of its kind in Asia, which is testament to our ability to quickly respond to market requirements.”
“Repo is a new class of interest rate product that complements our comprehensive Japan equity derivatives offering, enabling participants to risk-manage both costs and benefits in Asia’s largest securities financing market.”
The new futures solution further expands SGX’s suite of risk-management tools that meet increasing market demand for new trading instruments.
According to SGX, the TRF, with contract months listed up to 10 years, will also allow investors to trade a particular financing cost, the implied equity repo, for the first time.
The exchange explained that Japan has the largest and most mature securities borrowing and lending market in Asia.
It suggested that it has grown into one of the biggest markets for structured products against a low-yield environment.
SGX noted that they are driving futurisation in derivatives in response to client demand to mitigate pressures on capital, collateral and balance sheets, following Basel III and bilateral margining rules for uncleared OTC contracts.
Michael Syn, head of derivatives at SGX, commented: “We are launching a solution that perfectly meets our market participants’ needs for trading opportunities with increased transparency and less risk. This is the first product of its kind in Asia, which is testament to our ability to quickly respond to market requirements.”
“Repo is a new class of interest rate product that complements our comprehensive Japan equity derivatives offering, enabling participants to risk-manage both costs and benefits in Asia’s largest securities financing market.”
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