EBS and Thomson Reuters target FX transparency
Thomson Reuters and EBS will use an algorithm to blend FX price sources
Rival foreign exchange platforms EBS and Thomson Reuters are to combine the sources for their FX pricing, in what they describe as a co-operative bid to increase transparency for FX market participants.
FX benchmarking has been done by Thomson Reuters and EBS since 2006, when the Bank of England stopped publishing FX rates. The intention of the collaboration is to provide the most accurate picture of live-traded prices possible. Although prices have been posted every 30 minutes since March 2011, the rates were based solely on the main liquidity pool for each currency without taking into account the entire market.
The new blended FX fixing will be available on the EBS Market before the end of this year. It is already available on Thomson Reuters Eikon.
“This collaboration between Thomson Reuters and EBS is a great example of the industry working together to improve the overall trading experience for the benefit of all market participants,” said Phil Weisberg, global head of foreign exchange, Thomson Reuters. “By blending Thomson Reuters and EBS sources for our 30-minute FX fixings we are ensuring that maximum liquidity has been calculated within each currency fixing and therefore providing maximum transparency for the marketplace as a whole.”
A series of new FX trading venues have opened up in recent years. In August 2011, SURFACExchange opened a central order book trading venue for FX. Headed by Evgeni Mitkov, the venue aimed to provide an alternative for buy-side customers to the custodian banks. Meanwhile electronic spot trading market ParFX is due to launch within the next few weeks. ParFX was built by inter-dealer broker Tradition and is backed by 11 major global banks.
