The Singapore Exchange (SGX) and Korea Exchange (KRX) have entered an agreement called a Memorandum of Understanding (MOU) that involves the two exchanges investigating new ways to clear OTC derivatives contracts, according to a statement released on March 13, 2013.
"KRX, one of the world's leading derivatives exchanges, looks forward to the development of this partnership with SGX, Asia's leading clearing house," Ho-Chul Lee, president and chief operating officer of KRX, said in the statement. "This collaboration will explore possible synergies to better meet the needs of market participants, particularly in the Singapore and Korea markets."
The Star reports that this new partnership between between KRX and SGX has been signed as some countries have struggled with how best to implement derivatives regulations set forth by the G20 that require OTC contracts to be cleared.
The MOU involves the two exchanges looking into ways they can combine their clearing resources, as SGX has been clearing OTC derivatives since November 2010 and KRX plans to begin clearing these financial instruments in 2013.
Muthukrishnan Ramaswami, president of SGX, said that the exchange is happy to partner with the KRX to provide better service offerings to customers at a time when derivatives regulations are making clearing of OTC contracts necessary.
◦ Asset Liability Management
◦ Portfolio Risk
◦ Sensitivities & Hedging
◦ Stress Testing & Scenario Analysis