Singapore Exchange recently became the latest exchange to offer a clearing service for interest rate swaps, but with LCH.Clearnet enjoying a commanding position in the market, it will not be easy to break in. However, Muthukrishnan Ramaswami, president of SGX, tells Colin Packham why the exchange’s AsiaClear service will fulfil a need, even though Asian countries have not mandated clearing, and why interoperability is just a matter of time.
The Singapore Exchange announced on September 20 that it would expand its AsiaClear service, which clears over-the-counter derivatives, to include for the first time non-commodity products.
AsiaClear will start clearing US and Singapore dollar interest rate swaps, joining LCH.Clearnet and CME Group among others in offering banks the means to mitigate their counterparty risk in the market estimated to have a total notional value of $400tr. SGX plans to offer currency forwards at a later date.
However,...