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SINGAPORE: Singapore Exchange (SGX) and SingTel will offer ultra-high speed trading access from August in a bid to boost algorithmic or black-box trading for securities and derivatives.
This makes SGX the first exchange in Asia to offer sub-millisecond access to its trading engines.
The new service, called "SGX Proximity Hosting Services", allows SGX members and their customers access to SGX's trading engines at a speed that is more than four times the current rate.
The proximity hosting will be housed at SingTel's EXPAN data centres.
Presently, SGX estimates only about 25 percent of its securities and derivatives trading volumes originate from black-box trading or high-velocity trading.
But it is targeting to grow this aspect to as much as 40 percent, as currently seen in US and European markets.
Gan Seow Ann, senior executive vice president, Markets, SGX, said: "I would certainly expect that if we were to be able to cultivate this group of people to form a larger percentage of our volume, to constitute a larger percentage of our volume in the marketplace, then the overall market would benefit from it because you're going to have a much deeper and much more liquid market."
Under current methods, it takes up to 20 milliseconds for a trade to be executed. With the new service, high-velocity traders will be able to execute hundreds of financial transactions in the blink of an eye.
Bill Chang, executive vice president, Business, SingTel, said: "This is Asia's first and SingTel is proud to be a partner of SGX, and we are also looking at a go-to-market partnership to attract companies all around the world into Singapore to create a vibrant financial hub."
Subscription to the new higher speed service will cost traders S$15,000 per month. The new service is expected to increase trading volume and depth in both the securities and derivatives markets here in Singapore.
SGX said it expects to sign up ten members within the first year of introducing the new service.
Currently, it has 50 clearing members in both the securities and the derivatives market.
- CNA/so
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