The financial markets including foreign exchange market have been highly volatile since the beginning of 2022, so it’s easy to see why Singapore traders are hoping to profit from extra trading opportunities in both stock and foreign exchange financial markets.
There are various types of financial assets to pick from when it comes to trading. A popular way to trade foreign exchange is by using the foreign exchange market, often known as forex or FX .
Forex trading is about exchanging one currency for another to profit from changes in exchange rates and is done in pairs such as EUR/USD, USD/SGD, and JPY/SGD.
Singapore’s Foreign Currency Exchange Market Situation
Singapore is the third-largest FX center in the world, after London and New York, and the largest financial hub in the Asia Pacific. Every day, almost $500 billion in foreign exchange volume changes hands in Singapore. The foreign exchange market is essential to Singapore’s position as a regional trade and corporate treasury hub, as well as the international financial center’s viability. Singapore has a deep and liquid market for trading and hedging G10 and Asian emerging market currencies, with all five big banks placing their regional FX sales and trading teams there.
As a major FX hub, Monetary Authority of Singapore is eager to improve Singapore’s FX market in order to fulfill the region’s growing trading and hedging needs. The MAS watchdog works closely with financial market participants such as large international banks and every single forex broker in Asia that solicits clients from Singapore. The main goal is to protect Singaporean retail traders and improve Singapore’s e-trading safety infrastructure. In FX and OTC derivatives trading, price discovery and FX transaction execution will improve, and market participants will benefit from improved latency, pricing, and liquidity.
In addition to Singapore’s worldwide leadership in OTC derivatives, their exchanges offer a comprehensive suite of exchange-traded FX futures and options contracts to supplement the OTC market by offering market participants more hedging products and solutions.
The MAS expanded
The Securities and Futures Act to include OTC derivatives in 2018. Securities, units in collective investment schemes, exchange-traded derivatives, over-the-counter derivatives, and spot foreign exchange contracts for leveraged foreign exchange trading are regulated under the Securities and Futures Act, and financial institutions wanting to engage in these activities must obtain a Capital Markets Services (“CMS”) license. The CMS licensing guidelines and application form may be found by clicking on the link below.
FX market growth in 2022 and beyond
With the growing popularity of Forex trading among the institutional and retail traders in Singapore, it’s important to keep in mind that according to industry experts from NorzTrading the local fx market volume will continue to grow by at least 12% in 2022. In the post-covid era of high inflation, problems with product supply chain and rising energy costs, Singapore Forex market will continue to be a complex and fast-paced industry heavily leveraged by the world’s largest financial organizations.
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