Thursday, 25 April 2024
APEX receives MAS licence to operate Singapore’s third derivatives exchange and clearing house
Asia Pacific Exchange (APEX)announced that it has received approval from the Monetary Authority of Singapore (MAS) to operate Singapore’s third derivatives exchange as well as a clearing house. APEX, backed by some of China’s biggest conglomerates, plans to launch trading in the second quarter of 2018 and has commenced the process to admit trading and clearing members.
APEX will offer futures and options contracts covering both commodity and financial derivatives products, including agriculture, energy, petrochemical, metal, interest rates and stock indices. Its first contract is a USD-denominated physically-delivered palm olein futures. Mr Eugene Zhu Yuchen (朱玉辰), Founder and Chief Executive Officer of APEX, said: “APEX’s vision is to establish itself as an exchange that will be the Asian centre for price benchmarks to be referenced by global market participants.
“We believe that as the economies and population of Asia grow, the centre of gravity for global trading in commodities and financial instruments will shift to the region.
“We are optimistic that Asia will play a significant role in the price discovery and benchmark reference for agriculture, energy and metals amongst others.” Explaining the choice of Singapore, Mr Zhu added that Singapore’s well-regulated financial sector, efficient financial and technological infrastructure and deep talent pool, make the Republic an ideal location for derivatives trading. In addition, the majority of global commodity trading houses and financial institutions have extensive operations or are headquartered here. Mr Zhu added: “Singapore is also an important and strategic partner to China’s ‘One Belt One Road’ initiative, giving me the confidence that APEX will be well positioned for success in years to come.”
He allayed any concerns that APEX would pose competition to existing futures exchanges. Mr Zhu said: “There is a huge market for commodities futures trading in Asia and we believe there is room for more exchanges in the region. Experience in most countries shows that whenever competition is introduced, it generates buzz and increases market volumes all round. “We see ourselves as playing a complementary role to existing exchanges. With the entry of another player, market participants will have an additional venue for hedging, which is an important function in futures trading to take care of any asset mispricing.” APEX’s palm olein contract, when launched, will complement Bursa Malaysia Derivatives Exchange’s crude palm oil futures contract and Dalian Commodity Exchange’s RBD palm olein futures contract. It will provide additional avenues for inter-market hedging opportunities for edible oil hedgers and traders. Subject to regulatory approvals, APEX’s product pipeline will also include a suite of commodity, agricultural and financial contracts. APEX’s vision of bringing Chinese and international market participants onto a common well-regulated and efficient platform was conceived by Mr Zhu, who relocated with his team to Singapore in 2016. A distinguished pioneer in China's futures market, Mr Zhu previously helmed the Dalian Commodity Exchange and the China Financial Futures Exchange, and also served as President of China Futures Association and Vice Chairman and CEO of Shanghai Pudong Development Bank (SPD). He expanded SPD’s investment banking business and under his stewardship, SPD was ranked 35th among the World’s Top 1000 banks by The Banker in 2015. Backing Mr Zhu and APEX are major shareholders which include CEFC China Energy (CEFC), Xinhu Group (Xinhu) and several international investment funds. CEFC is one of China’s biggest conglomerates with core businesses in energy (oil & gas) and financial services. Xinhu is a pioneer Futures Commission Merchant in the Chinese futures market and has since expanded to fintech, financial services and real estate development. Mrs Lim Hwee Hua (陈惠华), who was formerly a Singapore Minister in the Prime Minister’s Office and the Second Minister for Finance and Transport, chairs the board of APEX. She is also a senior adviser to US private equity firm Kohlberg Kravis Roberts, and a director of several publicly-listed companies.
Mrs Lim said: “APEX will be an exciting new player adding vibrancy, depth and breadth to Singapore’s derivatives market. We hope to satisfy the huge unmet demand for hedging in commodities by Asian-centric participants. “We believe that with Eugene’s experience and expertise, APEX will prove to be a game changer and a worthy partner to other exchanges in the region and around the world.” Mr Satvinder Singh, Assistant Chief Executive Officer, International Enterprise Singapore, said: “Singapore is already Asia’s top commodities trading hub today. The establishment of APEX in Singapore offers new risk management tools for the global traders based here, adding to the growth and vibrancy of our commodities cluster. “As the government agency driving international trade, we support and welcome new partners in strengthening Singapore’s commodity derivatives ecosystem and creating new opportunities for our people.”
Re-disseminated by The Asian Banker
