MCX promoter to launch new commodities exchange in Singapore

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According to Leo Melamed, chairman of the advisory board of SMX, the new electronic exchange will provide a platform for trading in futures and options on precious metals, base metals, energy, agricultural commodities, currency pairs, carbon credits and commodity indices.

It will be the first time in Asia that such a diversified range of products are being offered on a single platform, Melamed, who is also the chairman emeritus of Chicago Mercantile Exchange (CME), said.

"We expect Asia to lead the growth in the commodities markets in the next few years," he said, adding, "Market participants around the world will benefit from price discovery of these commodities in Asia. The SMX will be a barometer for the dynamic demand-supply fundamentals in this region."

"Singapore ranks among the top three international financial centers in the world today along with New York and London with an established trading and commodity hub, open economy, robust regulatory framework under Monetary Authority of Singapore (MAS), a thriving port, business friendly environment, and its geographical location - making it an ideal destination to host an international commodity derivatives exchange like SMX," said Jignesh Shah, chairman and group CEO, FTIL.

"SMX will be a global exchange with multi-product portfolios in commodities and we are combining knowledge with technology for correct price discover mechanism in commodities," Shah said.

"Markets are the barometer of growth for any economy and SMX will be the growth engine for Asia from Singapore with rest of the world - through transparent price discovery, risk hedging and will propagate structured private and public investment deep into the economy," he said, adding the group has already applied for regulatory approvals from MAS.

SMX will set up its own wholly owned clearing house called Singapore Mercantile Exchange Clearing Corporation, which will provide settlement guarantees for trades executed on the new exchange, Shah said.

"There is so much potential in Asia. The whole region needs so many more futures contracts. The US has four commodity exchanges for example," he said, adding the exchange will begin trading with an initial capitalization of S$50 million ($37 million).

"The Financial Technologies Group's interest to establish SMX in Singapore, within close proximity to the region's largest producers and consumers of several commodities, underscores Singapore's position as a key commodities trading hub," said Lim Hng Kiang, Deputy Chairman, MAS and Minister of Trade and Industry, Singapore.

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