11 Aug 2020

Singapore: a fast-changing FX landscape

By Matthew Lempriere, BSO Head of Asia Pacific & UK

It is now almost a year since the Bank for International Settlements (BIS) published its Triennial Central Bank Survey on Foreign Exchange turnover, which showed that Singapore had retained its position in third place behind London and New York, slightly ahead of Hong Kong SAR.

Since BIS’s previous report was released in 2016, the Monetary Authority of Singapore (MAS) has done much to further its aim of establishing Singapore as the leading FX trading hub in the region. Through a range of incentives, it has steadily lured an increasing number of banks, brokers, liquidity providers (LPs) and trading platforms to the city-state.

First movers

A particular area of focus for MAS has been supporting first movers in primary inter-dealer platforms, multi-dealer platforms and FX liquidity venues to set up their matching, pricing and trading engines in Singapore.

The approach seems to be paying off. In the last few months, the list of major banks launching new electronic trading platforms located in Singapore has grown significantly, with announcements coming thick and fast from the likes of Standard Chartered, JP Morgan Chase, BNY Mellon, Citi, BNP and UBS.

But it’s not just the banks who have been making the move to Singapore. XTX, the largest liquidity provider globally in FX spot/forwards (Euromoney, 2019), was one of the first non-bank LPs to announce that they were building a pricing and trading engine at Equinix’s SG1 facility, in 2018. And in March of this year, Equinix further announced that several additional companies, including Euronext FX, Lucera, Orient Futures and Spark Systems amongst others, also now host their FX trading platforms at Equinix’s data centres in Singapore.

Decisions like these are not taken lightly, so there are undoubtedly significant opportunities that these firms, and others, are looking to capitalise upon by making Singapore the centre of their regional FX electronic trading activities.

Reducing latency

A major factor behind all of this is the reduction of trading latency. Although Singapore has a higher daily FX turnover than Japan, Tokyo remains one of the three key FX trading centres globally (along with New York and London). But routing trades from Singapore via Tokyo incurs a round-trip latency of 70-80 milliseconds, whereas routing directly to a matching engine in Singapore can reduce latency to the point where it is negligible. This factor alone is likely to draw more high frequency trading (HFT) firms and hedge funds to Singapore, once a critical mass of liquidity providers, brokers and trading platform providers has been established.

For any firm looking to take advantage of the growing opportunities that the Singapore FX market offers, having the right infrastructure and fast, reliable, flexible connectivity in place is crucial, not only to Tokyo, New York and London but also to other trading centres around the world, particularly Southeast Asian nations, where rising trade is driving a need for more sophisticated FX instruments and facilities. So it is essential to work with specialised infrastructure and connectivity provider who can facilitate all of this.

The FX market in Singapore is evolving rapidly and these are exciting times. Perhaps it is not surprising that as recently as June 2020, Singapore Exchange (SGX) announced its intention to buy an additional 80% stake in FX trading platform BidFX – which has seen record trading volumes in recent quarters – for $128 million.

There will no doubt be further interesting announcements as this dynamic market grows.

Get in touch with the experts today on hello@bso.co


The company was founded in 2004 and serves the world’s largest financial institutions. BSO is a global pioneering infrastructure and connectivity provider, helping over 600 data-intensive businesses across diverse markets, including financial services, technology, energy, e-commerce, media and others. BSO owns and provides mission-critical infrastructure, including network connectivity, cloud solutions, managed services and hosting, that are specific and dedicated to each customer served.

The company’s network comprises 240+ PoPs across 33 markets, 50+ cloud on-ramps, is integrated with all major public cloud providers and connects to 75+ on-net internet exchanges and 30+ stock exchanges. The team of experts works closely with customers in order to create solutions that meet the detailed and specific needs of their business, providing the latency, resilience and security they need regardless of location.

BSO is headquartered in Ireland, and has 11 offices across the globe, including London, New York, Paris, Dubai, Hong Kong and Singapore. Access our website and find out more information: www.bso.co