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SGX and KRX to jointly explore OTC clearing capabilities

The Singapore Exchange (SGX) and the Korea Exchange (KRX) have inked a memorandum of understanding (MOU) to collectively work for the development of over-the-counter (OTC) financial derivatives clearing capabilities.

Commenting on the agreement, Korea Exchange president and COO Ho-Chul Lee said that the global awareness of Korea and Singapore OTC derivatives markets is growing, which helps us to increase participation levels.

"This collaboration will explore possible synergies to better meet the needs of market participants, particularly in the Singapore and Korea markets," Lee added.

The agreement will further boost SGX’s clearing capabilities, which is trying to support its customers’ business expansion and risk management with new products, services and partnerships.

SGX operates as central counterparty for OTC trades and it has cleared almost $300bn notional of OTC financial derivatives including interest rate swaps and non-deliverable Asian foreign exchange forwards since November 2010.

Korea Exchange manages a centralized securities and derivatives market where derivatives, stocks, and bonds are traded on a common platform.