Singapore’s bourse SGX has acquired cloud-based trading platform BidFX in a bid to expand its foreign exchange capabilities beyond futures into the over-the-counter foreign market.
After first acquiring 20 percent in March 2019, SGX will now acquire the remaining 80 percent of BidFX from other shareholders for around $128 million, according to a statement, with expectations for the transaction to complete in July 2020.
Although SGX is already an established FX futures player, the new acquisition could help springboard the exchange into the much larger FX OTC market, estimated by the BIS to be around 50 times larger than the FX derivatives market.
Integrated Platform
According to SGX, the synergies of the two firms alongside «the opportunity to support international FX participants from pre-trade data and analytics, trade execution to post-trade clearing» motivated the acquisition.
«The future of FX lies in the ability for market participants to benefit from price discovery, liquidity and transparency for both OTC and listed futures trading, in a single unified venue,» added SGX chief executive Loh Boon Chye. «With BidFX as part of the SGX Group, we can now serve a wider FX community with more comprehensive solutions and enhanced distribution capabilities, while bringing together the two growing and mutually-reinforcing pools of liquidity.»
Since its establishment in January 2017, average daily volumes have grown at a compound annual growth rate of $57 billion at BidFX to reach $31 billion in May 2020. Over 100 of the world’s largest banks, hedge funds and asset managers are currently connected to the platform.
