Lynnice Ng, Head of Marketing
Lynnice develops the marketing strategy for the MAS-licensed, Shanghai-headquartered brokerage firm based in Singapore, Orient Futures Singapore, and leads the team to execute sponsorship of events aligned with brand and business objectives.
With a Bachelor of Business degree and a Master of Arts (Contemporary China) from Nanyang Technological University, certificates of Capital Markets and Financial Advisory Services (CMFAS) Module 2A and Module 6A, she is passionate about the financial services industry and takes pride in providing value to clients and all, in the areas of content and events.
Soon Yujian, Marketing Associate
Yujian is the content strategist and writer in the marketing department of Orient Futures Singapore.
With a Bachelor’s degree in English from Nanyang Technological University, he gathers insights about the derivatives industry and turns them into bite-sized news. He enjoys researching market news, industry trends, and reports. His research expertise is also readily presented in articles such as the QFI scheme, and informative articles such as the FIA article series.
In “The Clearing Environment, Volatility, New Products”, much was discussed about the roles of central counterparties (CCPs) in the derivatives and innovation space. This includes inherent structures of the industry and how operational procedures can be built to smoothen the flow of trading from one party to the next.
The following are some key questions and answers from the conference.
What is the State of Asia in the Derivative Space and Products?
From APAC, the trade volume is up YOY (year-on-year) for FX, commodities, iron ore, and listed futures.
From SGX, the focus is placed on the NZX and SGX strategic partnership agreement to unlock and accelerate the distribution and growth potential of NZX’s dairy derivatives market.
Additionally, in the range of ESG (Environment, Social, and Governance) products, the exchange has also newly launched several products such as:
EV batteries
- SGX FM Cobalt Metals IN-WHS Rotterdam (Standard Grade) COM/COMF
- SGX FM Cobalt Hydroxide CIF China Futures COH/COHF
- SGX FM Lithium Carbonate CIF CJK (Battery Grade) LIC/LICF
- SGX FM Lithium Hydroxide CIF CJK (Battery Grade) LIH/LIHF
Climate-Action Indices
About Regulations
Jurisdictions can be complicated, and markets are subjected to various sources of stress, such as geopolitics or country conflicts. Hence, interconnectivity becomes a key factor in maintaining the systems put in place by each regional zone.
What parts of clearing are good to mitigate other issues?
Clearing Party Integrations
In organizations, the integration of back-end and front-office space will allow clearing parties to achieve several objectives. This includes the management of defaults, smart resource management, risk management, and the quick movement of collaterals. They are also in a better position to assess the value proposition of products.
However, from a country’s perspective, it will be crucial for clearing parties to allow for the approval of products within a reasonable timeframe. In Europe, a new product can take 12~24 months; in the US, a new product can be launched in a much shorter time. An appropriate time frame should fall somewhere in between the two spectrums.
Nonetheless, the CCP currently has clear, thorough rules which are beneficial to structure these processes.
Digital Assets
From the digital asset front, the progress from Bitcoin to Blockchain to crypto products happened in quick succession and regulatory procedures attempted to keep up. Currently, on regulated platforms, most traders are retail driven and remain cautious and small in proportion to the crypto market.
With the FTX event that has occurred, the appetite for digital currencies is likely to decrease, and there is likely to be an erosion in market confidence. In response, more regulations are expected to kick in over the next quarter to access the profile of the products as well as to enact robust control and risk frameworks.
Though the cryptocurrency market is small in comparison to its counterparts such as futures or stocks, it was gathered that a spill over risk might be possible.
Tangential To The FTX incident, Is Intermediation The Way To Go?
Limiting risks in one spot will always lead to them popping up in another place. For example, a credit risk that is limited can easily become a liquidity risk. Hence, intermediation ad curbing measures can only help within a certain range. In today’s world, US/Euro dollar might be the only currency that is liquid 24/7.
Additionally, it is difficult to decide which products require intervention. For example, a hundred investors categorized as intermediate traders may not necessarily mean the equivalent of products being intermediate. Each product contains its own mechanics and controls that are studied independently.
What are the Effects of the Unprecedented Volatility in the Market?
With the Euro crisis, margins are expected to move around and there is predictability in the market. The lack of stress in wonton situations like this suggests that things can be taken out of equations and the market will still run smoothly.
Part of the smoothness in these operational pipes can be accounted for by the increasing transparency between brokers and clients. The appetite and buffers that are left by clients with the clearing house are also increasing.
Overall, liquidity is one of the key aspects to look out for amidst these market conditions.
Limitations
“A feature of CCP is prohibitive measures, but if a majority of the trades are OTC (70%), the CCPS can only target 30%”
– FIA Asia 2022
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG).
We provide premium customer service at an affordable cost to all our clients. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
