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CAPITAL MARKETS

MaxxTrader deal brings SGX closer to FX endgame

Deal strengthens SGX in the FX OTC market, bringing it closer to being the full-service operator Boon Chye Loh wants it to be.

An SGX sign is pictured at Singapore's stock exchange
Photo: Edgar Su/Reuters

Singapore Exchange (SGX) is buying MaxxTrader, an FX trading platform, in its latest effort to become not only a multi-asset exchange but the continent’s leading foreign exchange derivatives marketplace.

The $125 million acquisition from FlexTrade Systems follows the purchase of BidFX last year. Where BidFX has a buyside customer base, MaxxTrader is stronger on the sell-side. In combination, these two deals position SGX firmly in the over-the-counter FX space to go alongside its existing strength in on-exchange currency derivatives.

There are good reasons for seeking to be in this flow. The global OTC FX market was worth $6.6 trillion in 2019, according to SGX data citing the Bank for International Settlements, having grown by a compound annual growth rate of 9% since 2004.

SGX says that 29% of the global FX market, or $1.8 trillion, is addressable for electronic FX trading through multi-dealer platforms and electronic communications networks.

Additionally, Asian FX is growing much faster than G8 currencies – 10% annually since 2007, versus 6% for G8, according to the SGX – and the exchange claims already to be a leading Asian FX hub, ranked first in the Asia-Pacific region and third globally.