The Singapore Stock Exchange (SGX) acquired the remaining 80% stake in BidFX, a provider of electronic forex trading solutions for $128m as part of its strategy to expand into the global FX over the counter (OTC) market.
BidFX is a cloud-based FX trading platform for institutional investors. It was previously a subsidiary of TradingScreen, which had been incubating BidFX and spun it off in 2017. Since then, average daily volumes have grown at a compounded annual growth rate (CAGR) of 57 % to $31 bn as of May 2020. It has over 100 of the world’s largest banks, hedge funds and asset managers currently connected to its platform.
SGX, which is the largest foreign exchange (forex) derivatives exchange in Asia, first acquired a 20% holding last March for $25m with the intention to combine FX futures with OTC markets.
The main drivers to buy the rest of the company are the synergies between the two groups as well as the opportunity to support international FX participants from pre-trade data and analytics, trade execution to post-trade clearing, according to the exchange.
The exchange has continued to grow its FX futures franchise since it was launched seven years ago and has generated $3.8 trn in traded volumes. It recently introduced FlexC FX Futures which allows market participants to trade customisable FX futures as OTC and clear transactions on the exchange.
The acquisition comes at a time when the SGX along with the Monetary Authority of Singapore (MAS) have been actively bolstering the city-state to become the FX hub of Asia.
Loh Boon Chye, Chief Executive Officer of SGX, said in the statement: “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. BidFX is ahead of the curve in developing sophisticated electronic FX trading and workflow solutions.
He adds, “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.”