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Foreign Exchange

SGX launches dual currency trading for ETFs

The Singapore Exchange will offer investors dual currency trading for exchange traded funds (ETFs) from June 15, allowing foreign-currency denominated ETFs to be traded in Singapore dollars or US dollars.

The move follows SGX’s introduction of dual-currency securities trading in March that allowed investors to buy or sell assets in US or Singapore dollars regardless of the currency in which it was first bought or sold. The newly launched selection of ETFs will also be fully fungible, meaning investors can directly buy – or sell – securities in, say, SGD, if the price quoted on the exchange is lower – or higher – than the converted amount their brokers would charge. The option also means investors will not have to wait until date of settlement to know the converted amount.

SGX is working in conjunction with BlackRock’s iShares and CIMB-Principal Asset Management to offer seven dual currency emerging market bond and equity ETFs.

“With this new offering from SGX, investors can enjoy trading flexibility and cost efficiency while benefiting from investing in ETFs,” says Nels Friets, head of securities at SGX. “Issuers will also benefit from a wider pool of investors, as those who prefer to trade in Singapore dollars enter the market.”

SGX introduced dual currency trading for securities on March 22, 2012, with Hutchison Port Holdings Trust the first listed security to launch dual currency units.

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