Singapore's SGX building Asia’s largest one-stop forex platform with $125 mil. MaxxTrader acquisition

02, Aug. 2021

MaxxTrader has built a global client and dealer franchise with over 100 global banks, regional banks, broker-dealers and hedge funds currently connected to its platform. (Photo: MaxxTrader)
MaxxTrader has built a global client and dealer franchise with over 100 global banks, regional banks, broker-dealers and hedge funds currently connected to its platform. (Photo: MaxxTrader)

By Celine Chen

SINGAPORE, NNA - Singapore Exchange (SGX) is shelling out approximately $125 million to fully acquire FX trading platform MaxxTrade to beef up its forex over-the-counter (OTC) space as a key growth pillar under its multi-asset strategy.

Singapore-based MaxxTrader is a leading provider of FX pricing and risk solutions for sell-side institutions including banks and broker-dealers, as well as a multi-dealer platform for hedge funds.

The acquisition is paving the way for SGX to build an integrated and scalable platform together with its wholly-owned subsidiary, BidFX, that will become Asia’s largest one-stop venue for international FX OTC and futures participants, said the exchange.

"The acquisition is expected to be completed by December 2021 and will accelerate SGX’s plan to build an integrated FX ecosystem and marketplace that facilitates global access to OTC and on-exchange currency derivatives," said SGX in a press release.

MaxxTrader is owned by New York's FlexTrade Systems Inc., a global leader in multi-asset execution and order management systems. Since its incorporation in 2008, MaxxTrader has built a formidable, global client and dealer franchise with more than 100 global banks, regional banks, broker-dealers and hedge funds currently connected to its platform.

Its average daily volume has grown to over $17 billion as of June 2021.

MaxxTrader’s strong sell-side client base complements the buy-side clientele of BidFX, a leading cloud-based provider of electronic FX trading solutions which SGX acquired in 2020, said the exchange, adding that both acquisitions are shaping part of SGX’s multi-phase strategy to set up an integrated Asian FX marketplace for global investors.

SGX CEO Loh Boon Chye said, “Since SGX expanded from FX futures to the global FX OTC market, we continue to cement our footprint in this fast-growing and sizable $6.6 trillion-a day global market. We are excited to acquire MaxxTrader, which further enhances our FX OTC offering and widens our customer base across the sell- and buy-side.”

The next step for SGX is to offer clients a full suite of FX futures and OTC solutions, by building a primary FX OTC marketplace anchored in Singapore, Loh said.

"In turn, this would accelerate our vision to create fungible and convenient access for diverse, global customers to different pools of liquidity under one integrated platform on SGX and build Asia’s largest one-stop venue for international FX OTC and futures participants,” added Loh.

Globally, Singapore is the third largest FX centre after London and New York, and the largest in Asia Pacific. Everyday, over half a trillion US dollars of FX is traded in Singapore, according to the Monetary Authority of Singapore.

SGX currently reigns as Asia’s most international multi-asset exchange and largest FX derivatives marketplace. In June, its FX futures volume surged by 16 percent year-on-year to $140 billion, hitting new records across multiple contracts.

The FX sector is central to Singapore's standing as a major trading and corporate treasury hub in the region, bolstering the country's position as a leading international financial center.

Supporting SGX's FX vision, Manish Kedia, CEO designate of MaxxTrader, said, “We share SGX’s FX vision to offer buy-side and sell-side clients a wide range of FX products and liquidity across OTC and futures globally. With SGX’s strong focus and investments in FX, we expect to accelerate innovation and deliver exciting new solutions for both our clients and liquidity providers."

As one of the first platforms to host banks, brokers, and hedge funds in Singapore’s data center SG1 Liquidity Hub, MaxxTrader will continue contributing to the success of Singapore as a central liquidity hub in Asia, Kedia added.

According to the latest edition of the Global Financial Centres Index issued in March, New York retained first place with London and Shanghai claiming second and third spots respectively.

Hong Kong was ranked fourth, while Singapore took the fifth position.

In rankings for industry sectors, Singapore came in second for fintech and insurance, and third for trading and professional services.

The city-state was ranked fourth for investment management and the government and regulatory segment. It was placed eighth and 11th for banking and finance accordingly.

The improvement of average ratings of more than 120 financial centers over the previous assessment last year suggests growing confidence in the financial system compared to the early stages of the COVID-19 pandemic, according to the report accompanying the index which is produced twice a year by research group Long Finance in collaboration with Z/Yen, London's leading commercial think-tank; and the China Development Institute.

However, overall ratings fail to recover to pre-pandemic levels seen in 2019, thus reflecting the "continuing uncertainty around international trade, the impact of the covid-19 pandemic, and geopolitical and local unrest," said the report.