The (SGX) announced this Monday that it will acquire the remaining 80 per cent stake in BidFX from its other shareholder(s) for a cash consideration of approximately US$128 million.
The SGX is the largest foreign exchange (forex) derivatives exchange in Asia and this acquisition would see the multi-asset exchange expand into the global FX over the counter (OTC) market.
SGX so far holds a 20 per cent stake in BidFX, a provider of electronic forex trading solutions. The initial acquisition occurred in March of 2019 and was made with the aim to bring together FX futures with OTC markets, the exchange said in its statement.
In particular, the exchange said that it has decided to purchase the remaining stake in the company due to the synergies between the two companies, as well as the opportunity to support international FX participants from pre-trade data and analytics, trade execution to post-trade clearing. SGX expects the transaction to be completed in July of this year.
Commenting on the acquisition, 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.
“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.”
SGX bolsters FX futures offering
The move from the SGX comes as the exchange, along with the efforts of the (MAS) have been actively bolstering the city-state to become the FX hub of Asia.
SGX has been developing its FX futures franchise, which saw the exchange launch FlexC FX Futures. This feature allows market participants to trade customisable FX futures in an OTC manner and clear transactions on the exchange.
By acquiring the remaining stake in BidFX, SGX will use the company to scale up its success and advance its global ambitions to offer an end-to-end forex platform and solutions.
“We are delighted to join the SGX group of companies and combine forces with the largest FX futures marketplace in Asia,” added Jean-Philippe Malé, CEO of BidFX in the statement.
“We will be, amongst other plans, expanding our coverage to include FX futures, which gives sophisticated investors a hedge to access the broader market across OTC and futures liquidity pools. As we continue to grow, we look forward to contributing to Singapore’s success as a central FX liquidity hub in Asia.”