SGX Announces Interest To Be Concentrator For Cross-Border Trades

Singapore Exchange Ltd (SGX) today announced that it is in exploratory talks with two straight through processing (STP) service providers to facilitate cross border settlements. The two organisations are Omgeo, a joint venture between the Depository Trust and Clearing Corporation and Thomson Financial, and Global Straight Through Processing Association (GSTPA).

SGX is considering proposals to be a Concentrator for the organisations. A Concentrator receives settlement instructions from market participants and transmits these instructions to the STP service providers for settlement.

Both Omgeo and GSTPA are developing services for matching trade settlement instructions. Omgeo's matching utility is called Central Trade Manager, while GSTPA's is called Transaction Flow Manager. Market participants, who do not have a direct link to the matching utilities can connect via a Concentrator to achieve STP for cross border trades.

With SGX as a Concentrator, it means that:

1. Local market participants can send settlement instructions via SGX to the matching utilities to settle trades in foreign markets.
2. Foreign institutions can send instructions via the matching utilities to SGX to settle trades in Singapore.
3. Participants in other markets who trade in non-SGX securities can use SGX as a single point of access to the matching utilities, enabling them to achieve STP efficiency for cross border trades without having to link to each matching utility. This will bring them cost savings and convenience.

SGX is reviewing the business model, including the range of services to be provided as a Concentrator, and the cost of providing these services.