ICAP is launching non-deliverable forwards on seven Asian currencies, as well as the Russian rouble on its electronic foreign exchange trading platform EBS on 3 March, further expanding it
ICAP is launching non-deliverable forwards on seven Asian currencies, as well as the Russian rouble on its electronic foreign exchange trading platform EBS on 3 March, further expanding its FX product offering.
The Asian non-deliverable forwards are in Chinese renminbi, Korean won, Indian rupee, Indonesian rupiah, Malaysian ringgit, Philippine peso and Taiwan dollar and are of one month duration.
The non-deliverable forwards are short term foreign exchange contracts in currencies which have restricted convertibility, providing an effective mechanism to hedge these currencies.
The currency is traded as a pair against the US dollar on the EBS platform, with settlement of the NDF calculated to reflect the difference between the contracted forward exchange rate and the prevailing actual spot exchange rate on the settlement date. This is then cash-settled in US dollars.
ICAP currently offers successful voice broking services in all national currency pair NDFs through the New York, London, Singapore, Hong Kong and Korean trading desks.
David Rutter, deputy chief executive of ICAP Electronic Broking, says ‘As the NDF markets continue to develop and become more commoditised, our clients increasingly benefit from electronic trading.
‘The NDF market is maturing and with this initiative, we are responding to client demand for the certainty of trade, liquidity and transparency that can best be provided via the EBS platform.
He concludes, ‘These NDFs will be available to EBS clients through the same channels as ICAP’s existing spot FX product offering.’
Benoit de Vitry, global head of commodities and emerging markets at Barclays Capital says, "As emerging markets volumes continue to grow there is an increasing appetite for electronic trading in NDF currencies".
Ivan Ritossa, head of global markets Asia Pacific, prime services and ecommerce at Barclays Capital, adds, "We are pleased to see that ICAP has recognised this client need for this service. As we have a single integrated FX platform it allows us to provide a global FX service."
ICAP is a leading trading venue for spot FX, forward FX, FX options and non-deliverable forwards for both electronic trading and voice broking. Trading volumes on EBS grew strongly in 2007 – with average daily volumes up 28 per cent year on year to USD182bn.
