Singapore mercantile exchange

 
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The Singapore Mercantile Exchange (SMX) is a pan-Asian multi-product commodities and currency derivatives exchange situated in Singapore.

SMX offers a comprehensive platform for trading a diversified basket of commodities including futures and options contracts on precious metals, base metals, agriculture commodities, energy, currencies and indices.


Trading Hours

1000 up till 0330 SGT Monday to Friday

Contracts Trading as of 15 November 2010

   *SMGOLD = Gold Futures Contract with physical delivery-based settlement
   *SMWTI = West Texas Intermediate Crude Oil Futures
   *SMBRE = Brent Crude Oil Futures denominated in Euros
   *SMEURUSD = Euro/US Dollar Currency Futures

Ticker Codes

Bloomberg

   * SMGOLD = VCRA comdty
   * SMWTI = VCLA comdty
   * SMBRE = VCBA comdty
   * SMEURUSD = IOLA curncy

Thomson Reuters

   * SMGOLD = SMAU
   * SMWTI = SMCO
   * SMBRE = SMBT
   * SMEURUSD = SMEU


New Product Announcements

  • World's first international black pepper futures contract
  • World's first iron ore futures contract, subject to regulatory approval, settled basis the Metal Bulletin Iron Ore Index
  • SMX TOCOM contracts based on TOCOM products including crude oil, gasoline, kerosene and gas oil, subject to regulatory approval


Essential Background

SMX offers market participants the benefits of market transparency, time zone convenience, price discovery and benchmarking, price risk management and multiple connectivity options. Counterparty clearing and settlement risk is effectively managed through its clearing house, the Singapore Mercantile Exchange Clearing Corporation. The regulator of Singapore's financial markets - the Monetary Authority of Singapore (MAS) - on 12 August 2010 granted 'Approved Exchange' (AE) status to SMX to operate as a regulated and licensed exchange.[1]

SMX went live for trading on 31 August 2010 as the first pan-Asian multi-product commodity and currency derivatives exchange. Products trading at launch include Singapore's first Gold Futures Contract with physical delivery-based settlement at high-security vaults, West Texas Intermediate (WTI) Crude Oil Futures, Brent Crude Oil Futures denominated in Euros and Euro-US Dollar Currency Futures. SMX's launch suite is being followed by multiple product launches to be introduced in the market after consultation with industry participants [2][3][4][5][6][7]

SMX is backed by Financial Technologies (India) Limited, which has successfully established 10 exchanges in India, Dubai, Singapore, Africa, Mauritius and Bahrain.

SMX is a member of leading international derivatives industry associations, such as the Futures Industry Association (FIA), the Swiss Futures and Options Association (SFOA), the Association of Futures Markets (AFM) and the Futures and Options Association (FOA).

Exchange Development

Tokyo Commodity Exchange (TOCOM) and SMX in April 2010 signed a memorandum of understanding (MoU) to explore co-operation and partnership mutually beneficial for both exchanges and market reach expansion. Under the terms of the MoU, both parties will work together with a view to explore mechanisms to enhance market liquidity and system efficiencies within each exchange, including the joint development of new business opportunities.

Thomas J. McMahon, Chief Executive Officer of the Singapore Mercantile Exchange, commented that this "MoU with TOCOM falls in line with our long term strategy to be the one-stop comprehensive product-range hub exchange which ties in physical commodities and derivatives players during pan-Asian trading hours. SMX and to a good extent Singapore, stands poised to be the central point of contact between all the world’s commodity derivative trading players and the individual pan-Asian markets where fundamentals dictate realistic price discoveries.”[8]

On 13 May 2010 SMX announced appointment of RBS as one of its settlement banks, as it continued to build traction with banking, financial and trading institutions in Asia as it got closer to its August launch.[9]

On 2 June 2010 SMX said that it will commence trading of West Texas Intermediate (WTI) light sweet crude oil futures contracts upon launch. Thomas J. McMahon, CEO of SMX, said, "We see this as the first step towards establishing a broad base and multiple product facility for energy hedging, trading and investing from Singapore. The addition of a globally recognized benchmark to the existing suite of products to be launched on SMX is complementary to our product strategy of establishing correlation and basis valuation for the Asian suite. Our complete energy complex will allow for hedging and investment across the entire energy product supply chain."[10]

On 15 June 2010 the Singapore Mercantile Exchange announced its launch suite's second energy product - Brent crude oil futures denominated in Euros - making SMX the first exchange in Asia to jointly offer both Brent and WTI contracts. Reuters describes this contract as only one without an equivalent listed on another exchange.[11]

On 22 June 2010 the Singapore Mercantile Exchange announced Vitol Group (Vitol), one of the largest global energy traders and TransMarket Group L.L.C. (TMG), one of the world's leading proprietary trading groups as Trade Members.[12]

On 25 June 2010 FFastfill plc, the leading provider of Software as a Service ("SaaS") to the global derivatives community, and SMX, jointly announced the appointment of FFastfill to provide connectivity to the Exchange. Conformance testing had been successfully completed and the London Stock Exchange-quoted FFastfill will offer full connectivity to the SMX portal. FFastfill joins the growing list of ISVs signing up to offer their clients complete and secure access to the comprehensive suite of derivatives to be traded on SMX.[13]

On 9 July 2010 SMX announced that it had signed up Phillip Futures as its first General Clearing Member. Phillip Futures - one of Singapore's top local brokerages, specializing in derivatives and currency trading - will be able to trade, clear, and settle its own trades, as well as those of its customers, including any other Broker Member or Trade Member of SMX.[14]

On 20 July 2010 SMX said it is introducing Euro-US Dollar Currency Futures at launch to provide investment and hedging opportunities for global investors in the Asian time zone. The launch of this new contract leverages off the global shift of foreign exchange trading from over-the-counter to exchange traded derivatives with central counterparty clearing, a gap that SMX expects to fill in a fragmented Asian marketplace [15]

The Monetary Authority of Singapore (MAS) in August 2010 officially granted 'Approved Exchange' (AE) status to SMX, the final approval needed to operate as a regulated and licensed exchange. The Singapore Mercantile Exchange (SMX) is the first pan-Asian multi-product commodity and currency derivatives exchange to offer such a diverse range of trade-able asset types for both local and non Singapore-based participation.[16]

On 17 August 2010 SMX announced that it would go live for trading on 31 August 2010. It had completed conformance testing with Independent Software Vendors (ISVs) and industry-wide testing with member firms prior to its impending launch.[17]

Two days later on 19 August 2010, RTS Realtime Systems Group (RTS), a leading global trading solutions provider, announced that it will provide connectivity and low latency access to SMX from the Exchange's first day of trading on 31 August 2010.[18]

On 23 August 2010, KVH Co., Ltd. (KVH) and Singapore Telecommunications Limited (SingTel), market leaders in low latency services in Japan and Singapore respectively, announced that Tokyo Commodity Exchange (TOCOM) and SMX will provide KVH-SingTel's low latency network solutions to market participants.

SMX went live for trading on 31 August 2010 as the first pan-Asian multi-product commodity and currency derivatives exchange with leading Trade and Clearing Members on board, along with world-class technology partners and Independent Software Vendors (ISVs) to develop both front and back office applications for optimal connectivity worldwide. To-date, Standard Chartered Bank, RBS and ICICI Bank have signed up as settlement banks. Price feeds on SMX Contracts are available through Bloomberg and Thomson Reuters.[19]

On 2 September 2010 SMX announced successful completion of its inaugural trading, clearing and settlement cycle.[20]

On 13 September 2010, Orc Software (SSE: ORC), a leading global provider of technology and services for advanced trading in financial instruments, today announced new market access to SMX, connecting exchange members and clients.[21]

On 23 September 2010 SMX announced that it had signed up Glencore Singapore as Trade Member of SMX.[22]

On 28 September 2010 SMX made two announcements on the same day, stating that it had signed a Memorandum of Understanding (MOU) with leading international physical Black Pepper trader and Vietnam’s largest Black Pepper exporter, Phuc Sinh Corporation, in an exclusive partnership to explore advancement strategies for the global Black Pepper trading markets.[23] It also announced that it will launch the world’s first international Black Pepper Futures Contract (Contract Symbol: SMPEPPER) on its cutting–edge electronic trading platform with physical delivery-based settlement, as its first agricultural commodity derivatives product.[24][25]

The next day on 29 September 2010 SMX announced that it plans to list the world’s first Iron Ore Futures Contract, upon regulatory approval, settled basis the Metal Bulletin Iron Ore Index. Metal Bulletin is the leading independent premium information and pricing provider for the metals industries. The Metal Bulletin Iron Ore Index (MBIOI) utilizes daily price data from a broad spectrum of industry participants and through leading independent Chinese steel consultancy and data provider Shanghai Steelhome’s widespread contact base of steel producers and iron ore traders across China. MBIOI’s tie-up makes it the world’s only index to-date with access to such data from a major Chinese partner.[26][27]

On 6 October 2010 SMX announced that it had signed up Total Global Steel Ltd as Trade Member, allowing London’s premier metal supplier and brokerage house to hedge risk on the SMX platform.[28]

On 12 October 2010 the Singapore Mercantile Exchange announced Trafigura as another SMX Trade Member. Trafigura is one of the largest independent commodities trading company, and is also the world's second largest independent non-ferrous trading company and the third largest independent oil trader.[29]

Trafigura's primary trading businesses are the supply and transport of crude oil, petroleum products, renewable energies, coal, refined metals, ferrous and non-ferrous ores and concentrates.

Two days later on 14 October 2010 SMX and ICICI Bank jointly announced the signing up of the latter as Special Clearing Member of the Exchange, making this partnership the first time an Indian bank's branch in Singapore is clearing and settling futures contracts for a Singapore-based exchange.[30][31]

The next day on 15 October 2010 a bilateral licensing agreement was signed between the Singapore Mercantile Exchange (SMX) and Tokyo Commodity Exchange (TOCOM) for the listing of SMX TOCOM contracts, upon regulatory approval, for TOCOM products including crude oil, gasoline, kerosene and gas oil. The agreement does not rule out the possibility of cross-listing wherein TOCOM might also list SMX products.[32]

In another exchange partnership agreement, SMX and the Taiwan Futures Exchange (TAIFEX) on 20 October 2010 signed an MoU to cooperate in the exploration of bilateral business opportunities.[33]

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