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Introduction
1) Congratulations to our friends at the FIA for bringing together the industry, virtually, once again. We applaud your efforts in putting together a strong agenda for the Asia Derivatives Conference year after year – well done.
2) The global derivatives space remains a linchpin of the world economy and as the leading industry group, the FIA plays an important role in supporting open markets and upholding the integrity of the financial system. Your advocacy work, amid the challenging business and regulatory landscape, continues to make a difference for the community.
3) On behalf of SGX, thank you for the opportunity to address this honoured gathering for a second consecutive year. For sure, I know many of us prefer to be in Singapore connecting in person, but here we are.
What the post-COVID world holds
4) As we look ahead to 2022, our resilience will be tested time and again by the upheavals of COVID-19 but I am optimistic that we will continue to make progress. For market participants, the direction of travel has been positive and there is much to be hopeful about. In fact, we are delighted with the plan to hold FIA Boca in person next year.
5) For almost two years now, the world economy has endured an unprecedented journey. We are not through yet; the road to repair and recovery will be long, and markets are already being transformed in fundamental ways.
6) Global supply chains are still facing immense challenges from changes in consumption patterns brought about by the pandemic. Given the sheer scale of disruption, cost pressures are likely to persist for some time to come. On our platforms, we continue to witness strong risk-management activity in bulk commodities such as iron ore and freight derivatives – the backbone of global trade.
7) COVID-19 has also accelerated digitalisation across sectors and businesses… by three to four years, according to some estimates … reshaping the way we interact with customers and other stakeholders. It is not just about being able to operate markets with everyone working from home – that is already a given, with resilience now entrenched in our DNA. For SGX, the pandemic has in many ways accelerated our plans to digitalise marketplaces. By deepening the liquidity, scale and growth of our capital markets through digital assets, we are further advancing Singapore’s standing as a multi-asset international financial centre.
8) Post-COP26, there remains much to do to meet the global climate challenge. Since I last spoke to you in 2020, there has been significant momentum towards a more sustainable, low-carbon future. In Glasgow, I was encouraged to see the private sector and financial sectors stepping up. SGX is one of the founding members of the Net Zero Financial Service Providers Alliance and Glasgow Financial Alliance for Net Zero (GFANZ); 450 institutions have signed up to GFANZ, committing some US$130 trillion; the figures will continue to grow. These large flows of capital will be a force in financial markets for years to come.
9) Through the twists and turns, markets are being transformed. In the coming year, we can expect this state of play to continue.
Collaboration is key to success
10) This is the context in which we believe collaboration will determine success. For over 30 years, SGX has been partnering and working alongside stakeholders across the ecosystem, helping investors navigate idiosyncratic risk in Asia and, perhaps, demystify the dynamics of this region.
11) The world’s investors are familiar with the China growth story, where our pioneering FTSE China A50 Index Futures remains the benchmark – a hyper-liquid, globally accepted futures on A-shares, with deep and established roots in the marketplace. We do not take the support of the community lightly and we will work to ensure its continued success.
12) Asia’s diversity means other emerging-market powerhouses also offer unparalleled opportunities. In India, where we recently opened a GIFT City office, we will ramp up efforts in the coming months to internationalise India’s capital markets alongside local partners and regulators. In Southeast Asia, where the 10 ASEAN economies are benefitting from the recovery in global trade, we are helping investors unearth opportunities in hidden gems such as Indonesia and Vietnam. The rapid growth of our new FTSE Taiwan equity futures follows close engagement with stakeholders as well.
13) Our business is to serve as an efficient single point of access, connecting the world to Asia. The SGX multi-asset offering enables participants to manage risk comprehensively, be it in petrochemicals, the Indian rupee or the Nikkei 225. We are also making strides bridging the OTC and futures world. And through collaboration, we can deliver better outcomes for all.
14) Taking a sustainable approach, we have been working to provide leadership for financing Asia’s climate transition and strengthen capacity-building for the broader financial ecosystem. The clock is ticking and the transition will require consensus and collaboration and cooperation from all of us. We believe exchanges can help steer the pathway to net-zero. SGX is working closely with GFANZ and other organisations, including the FIA, to accelerate the work in this region, while balancing Asia’s unique environmental, economic and social objectives.
15) In dealing with climate change, I believe we should be guided by the key principles that form the bedrock of marketplaces: FOT. By this I mean:
• Climate transition should be Fair, taking into consideration the varying social, economic needs of developing countries;
• It should be Orderly, accounting for the complexities of transition and adaptation; and
• It should also be Transparent, with data and disclosures being available for informed decision-making.
16) So, the ecosystem does matter. However we define growth, I urge all of us in the global cleared derivatives space – whether you are an investor or market participant, an exchange or clearing house, or regulator – to be willing to come together and collaborate.
Conclusion
17) Just as the fight against COVID-19 has shown us, today’s challenges can no longer be addressed by one institution, one country or even a single approach to solving problems. What has worked in the past will need to be constantly calibrated for the future. What is crucial is a collaborative, solution-oriented exchange of ideas and action.
18) Whatever comes in 2022, we need to remain nimble and innovative. We have emerged from the depths of uncertainty more resilient than ever so we can press on with confidence, for there will be many new opportunities to uncover and ways to succeed – and I might add, with Asia at the heart of the recovery.
19) Above all, let’s be ready to work together with an ecosystem state of mind.
20) I wish you all a rewarding conference. Thank you.
