A London-Singapore axis looks attractive Step into the visitors" gallery in Singapore's pint-sized parliament and you immediately sense how the tiny island nation modelled its chamber on Britain's parliamentary system. The benches face each other as in the House of Commons. There is a speaker's chair, even a mace. One difference is that debates lack the rambunctiousness of the Westminster circus. The other is that the country's ruling party has never lost a general election and dominates the benches with 80 seats to the opposition's paltry seven. Debate is a bit one-sided. Look around Singapore, however, and other similarities emerge between the Lion City and London. The legal system is English, and while the country's official language is Malay, English is the lingua franca of business. A thriving commercial arbitration centre has emerged in Singapore as companies in Asia increasingly seek to settle disputes in the region, and not exclusively in the traditional hubs of London and Paris. More arbitrations are being done in Asia as companies want to settle disputes in that timezone. Singapore's English legal system is seen as a politically neutral alternative to Hong Kong. London-based lawyers increasingly find themselves shuttling to Singapore's shiny new arbitration centre to service clients. That is the backdrop to an intriguing prospect: closer ties between Singapore and London as financial centres. The latest sign of this is talks between the Singapore Exchange and LCH.Clearnet over the possibility of the Asian bourse buying a stake in the UK clearing house - a jewel in the City of London's crown. The Singapore bourse would either take a separate stake or become part of an existing deal in which the London Stock Exchange is set to take a controlling 60 per cent shareholding in LCH.Clearnet. This may seem like an arcane deal between two little-understood businesses. But it makes sense since trading flows, much like commercial arbitration, are heading east. The businesses that feed off them, exchanges and clearing houses, are too. The financial reforms that have gripped the US and Europe since the 2008 financial crisis, especially those requiring greater use of clearing houses in derivatives markets, are also washing up in Asia. That is forcing exchanges to be alive to the opportunities this is throwing up in areas such as derivatives clearing as technology forces the business to globalise. Last month Reto Francioni, chief executive of Deutsche Börse, said his industry needed to look to where the real action is. "The crucial growth in our markets will not take place in the future in Europe or North America, but instead in Asia and Latin America," he told an audience in Germany. LCH.Clearnet has started to do exactly that. It recently applied for a licence to clear equities in Australia. The clearer already has a relationship with the Singapore Exchange through a project being worked on with the LSE to trade each other's blue-chip stocks. For Magnus Böcker, Singapore Exchange's Swedish chief executive, the attraction of a stake in LCH.Clearnet is obvious. It makes sense to establish a leg in the European timezone. Pulling that off would make up for the failed merger with the Australian bourse in 2011. Taking a stake would also give him a seat at the table in London to build a so-called cross-margining arrangement between his clearing house and the UK clearer. This would help traders save on the amount of collateral pledged against their trades as banks are squeezed by new capital requirements. It would also open the door to seamless derivatives clearing between London and Singapore. Mr Böcker often talks of Singapore as an "offshore" financial centre, making a virtue out of its position as a trading hub in southeast Asia. About 40 per cent of companies listed on his exchange are non-Singaporean, a foreign presence that is far higher than Asian rivals. In many ways London is in a similar position as an "offshore" financial centre for the eurozone. About a quarter of listings on the LSE are from outside the UK. Xavier Rolet, LSE's chief executive, needs an anchor in Asia and using LCH.Clearnet is a good way to find one. Looked at this way, a London-Singapore axis starts to look attractive. Especially now that Singapore's big regional rival, the Hong Kong exchange, is busy integrating the London Metal Exchange. Politically, it is fairly neutral too. Few deals have made more sense than this. And Singapore, for once, can work with London rather than mimicking it. Jeremy Grant is the FT's Asia regional corporate correspondent