The EBS Prime offering for non-bank FX traders, including hedge funds, is to be extended to Asia following significant take-up in Europe and the US.
The service has been approved for launch in Australia, Hong Kong and Japan, and will be made available to the professional trading community (PTC), which includes hedge funds, fund managers and CTAs - from across the region.
Following demand from customers, EBS, the provider of electronic trading and market data solutions, is now also investigating making the service available to other Asian markets.
It is estimated that there are around 7500 hedge funds worldwide, which are worth around USD 1 trillion and include those domiciled in Hong Kong, Sydney and Tokyo. As an indication of scale, it is estimated that more than USD 16 billion is invested in hedge funds in Sydney alone.1
The EBS announcement follows strong customer uptake for the service from European and US banks with more than 80 customers now live from both the interbank and professional trading communities and more than 100 in the pipeline.
Volumes traded through EBS Prime are also on the increase and EBS is now reporting average daily volume from EBS Prime alone of USD 7.8 billion. As an indicator of growth, around USD 1 billion per day was being transacted on EBS Prime in November 2004.
The EBS Prime service is available to bank and more recently non-bank professional FX traders. This second non-bank segment is already adding unique liquidity to the EBS Spot trading community, by putting more quotes into the market, and trading on both sides of the market.
Mark Monahan, Head of Global Sales and Service, EBS, said: "This is a major step forward for our business in the Asia Pacific region. We are delighted to have been able to extend the success of EBS Prime to customers here.
"Professional FX traders from both bank and funds have the opportunity to see the market through the pre-screened credit of an EBS Prime bank.
EBS launches in Korea as DBS joins spot trading platform
EBS has opened for business in Korea as an offshore broker for non-KRW pairs.
DBS Bank Limited, Seoul Branch, has also announced that it is joining the EBS Spot trading community as an EBS Prime customer of JPMorgan. This makes DBS the first bank in Korea to join the EBS Spot trading community, gaining access to global liquidity in trading the G7 currencies on EBS Spot, the world's largest currency trading platform.
The EBS Prime relationship allows DBS to see the FX market 'though the eyes' of JPMorgan and trade on similar prices that the banks sees, with access to exceptional liquidity.
The majority of all FX interbank trades in the major currency pairs are conducted using the EBS Spot dealing system. EBS has proposals with most of the major Korean banks to provide them with the opportunity of enhanced access to the G7 currency pairs through EBS, by partnering with one of the 16 EBS Prime banks.
The entry of EBS into the Korean market represents a key opportunity for Korean banks, given the rapid growth of FX trading volumes in recent years. Volumes in FX markets rose from USD 1.2 trillion per day in April 2001 to USD 1.9 trillion per day in April 2004, a 57 per cent increase. Spot FX volumes registered the highest increase from USD 387 billion in April 2001 to USD 621 billion in 2004, a 61 per cent increase.
South Korea is Asia's third largest banking centre and the world's fourth largest holder of foreign exchange reserves. FX reserves rose to a record of USD 200.25 billion in mid February 2005, up from USS 199.7 billion in Jan 2005. The market registers a daily FX market turnover of more than USD 20 billion.
EBS' move into Korea further affirms the strategic importance of Asia and recognises the potential it holds for an enhanced role in the global FX market. EBS has been operating in Asia since its formation 11 years ago, and today the region accounts for over 20 per cent of EBS' volume.
DBS is one of the largest financial services groups in Asia, the largest bank in Singapore and the fifth largest banking group in Hong Kong. DBS also serves corporate, institutional and retail customers in Thailand, Malaysia, Indonesia, India and The Philippines. In China, the bank has branches and representative offices in Shanghai, Beijing, Guangzhou, Shenzhen, Fuzhou, Tianjin and Dongguan.
Mark Monahan, Head of Global Sales and Service, EBS, said: "As one of the foremost Asian banks, DBS' relationship with EBS as a Prime customer is a key development for the FX trading community in Korea.
"DBS in Korea will have single screen access to all major currencies with exceptional liquidity and cross rates for the major currencies including EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD and AUDUSD."
Jee Fun, Low, General Manager of DBS Bank Ltd, Seoul Branch said: "As one of the largest financial services groups in Asia, DBS Bank Ltd is committed in supporting our customers and maintaining the bank's premier positions in consumer banking, treasury and markets, asset management, securities brokerage, equity and debt fund raising.
"The addition of EBS Spot and EBS Prime to our portfolio of services will enable us to support our clients to achieve their FX goals across Korea."
Dennis Wan, Managing Director and Head of Asia ex-Japan FX Distribution, JPMorgan, said: "Given the prevalence of the EBS system in the market and one of JPMorgan's key business areas being foreign exchange, it is fitting that DBS is our first customer in Korea.
He added: "Our firm has had a highly successful Prime partnership with DBS for over a year now and this event would set the stage in providing transparent and direct access to true interbank markets for all the FX players in Korea."