After 3 attempts, ICE to launch Singaporean Futures Exchange in November

Singaporean Futures Exchange of the Atlanta-based Intercontinental Exchange Inc (ICE) is at last set for inauguration in November. After three attempts to kick start the operations of Singaporean Futures Exchange, ICE has set the date and will commence the operations. ICE had dropped the earlier plan to launch Singapore Futures Exchange over a threatening alert from Zhengzhou Commodity Exchange on the issue of look alike contracts. ICE will become, after the launch, the first exchange to offer cleaning house operations in the US, Europe and Asia.

ICE Future Singapore and ICE Clear Singapore have developed five contracts in Brent, gasoil, gold and two in Chinese currency Yuan. These will be available for trading from the first day of trading i.e. 17 November.

Previously it was supposed to begin trading in late 2014. But, it couldn't take off. The recent delay for the third time was in May. ICE cited reasons for postponing the inaugural date to customary preparations.
ICE owns futures markets in the US and Europe.

It has bought Singapore Mercantile Exchange Pte for $150million in February 2014. Singapore Mercantile Exchange has been licensed to trade and clear derivatives in Singapore.

In March, the second attempt was disturbed with Chinese regulator threatening with legal action. ICE proposed to commence two futures contracts in cotton and sugar in March. Zhengzhou Commodity Exchange (ZCE) said it would take legal action against ICE as the two commodity futures contracts were as similar as those offered in China.

This unexpected development forced ICE to delay the launch of Singapore Futures Exchange. Later in December, ICE tried to launch Singapore Exchange based on Singapore Mercantile Exchange by introducing two commodity futures. But, ZCE following this development sent a 'Cease and Desist' letter. ZCE had demanded the US bourse for stoppage of the plans.

After all these attempts, ICE has decided to go with five contracts without those commodity futures it had planned earlier.

The launch of the Singapore Exchange will make ICE the world's first exchange to operate a clearing house in the US, Europe and Asia, three main geographies in the world.

The futures market in China has huge potential after the government relaxed norms on capital flows. The Chinese business conglomerates have a greater appetite for hedging and risk management.

The threatening of Zhengzhou Commodity Exchange has made several global banks cautious over their plans to participate in China's futures market.

Considering the huge potential in Singapore market, ICE opted for this venture. Singapore is fast emerging as financial hub for exchanges. Major dealers in commodities prefer Singapore hub for hedging and risk management services.

The advantages of low tax structure, English-based legal system and political stability make Singapore attractive over Hong Kong.