SGX gets US approval for derivatives clearing

The Singapore Exchange (SGX) has been recognised as a derivatives clearing organisation (DCO) by US derivatives regulator Commodity Futures Trading Commission (CFTC).

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New and existing US customers will be able to clear their derivatives contracts through the exchange’s clearing house “in compliance with the latest US laws and regulations”, the SGX said on Monday December 30.

Earlier in April, the bourse launched its iron ore futures contract in a bid to retain US clients unable to trade over-the-counter (OTC) swaps due to rules set out in the Wall Street reform bill, known as the Dodd Frank Act.

The SGX has been the most popular clearing venue for iron ore swaps. In 2013, it cleared more than 230 million tonnes of iron ore swaps, up from 108.9 million tonnes seen in 2012.

SGX said clearing members which are not registered with the CFTC as futures commission merchants would be able to continue clearing swaps contracts for US clients until March 31 2014, under the extension of the “no action relief” from the commission.