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- establish cooperation that would enable their members and traders to have cross-access to the exchanges' electronically listed products, and
- co-clear such products - with a view to promoting greater liquidity and offering a wider product range for both exchanges.
Cross-access, cross-trading and co-clearing of their derivatives products will offer mutual benefits for the exchanges, and their respective members and traders. Co-clearing will in effect render capital efficiency for their market participants through improved portfolio margining.
The creation of a cross-trading link between SGX and ADX will, for the first time, give Australia's financial traders real-time access to SGX's array of international products. Such a link would be subject to regulatory approval on both sides, but the exchanges see it as realistic and achievable, sometime in the first quarter of 2001.
Mr Thomas Kloet, SGX Chief Executive Officer, commented, "A cross-access link providing members of both exchanges to cross-trade derivatives products certainly broadens the product range for our members and traders, extends our market distribution and deepens the liquidity pool for our contracts. For SGX in particular, this bilateral relationship augments SGX's presence in the Australian equity and derivatives markets."
"A commercial relationship with SGX on the scale being discussed will be a terrific boost for our markets," ADX managing director, Mr John Herron, said. "Exchanges no longer can afford to be technologically isolated and still expect to be successful. Such an initiative will be a major step in meeting the strong demand from Australian traders for seamless access to international products."
