Singapore Exchange (SGX) is acquiring the 80 per cent stake it doesn’t already own in forex trading platform BidFX for around $128 million in cash to expand into the global foreign exchange over-the-counter (OTC) market.
“The synergies between SGX and BidFX, coupled with the opportunity to support international FX participants from pre-trade data and analytics, trade execution to post-trade clearing, propelled SGX to purchase the remaining stake,” SGX said in an exchange filing Monday.
The overall foreign exchange OTC market’s average daily turnover is $6.6 trillion, while the exchange-traded FX derivatives market is only around 2 per cent of the OTC market, SGX said, noting the opportunities to build on the exchange’s dominance in Asian FX futures.
SGX had acquired a 20 per cent stake in BidFX in March 2019 for $25 million.
BidFX, founded in 2017, is a cloud-based foreign-exchange trading platform for institutional investors. The platform’s average daily volume has had a compound annual growth rate of 57 per cent since its founding to $31 billion in May, the filing said.
Loh Boon Chye, SGX’s CEO, noted the opportunity to provide price discovery, liquidity and transparency to market players for both OTC and futures trading on a single platform.
“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,” Loh said in the statement.
BidFX, which was incubated as a subsidiary of TradingScreen before being spun off in 2017, counts more than 100 large banks, hedge funds and asset managers among its clients, the statement said.
The deal to acquire the remainder of BidFX is expected to be completed in July.