Reuters and CME have announced the first group of financial institutions that will participate in their joint venture FXMarketSpace Early Adopter Program.
FXMarketSpace is intended to be the world's first centrally cleared foreign exchange (FX) marketplace for the cash market.
The Early Adopter Program participating banks and prime brokers include: AIG Financial Products Corp., ABN AMRO, Barclays Capital Prime Services, Citigroup, Credit Suisse, Fimat, HSBC, JPMorgan, Merrill Lynch, Prudential Financial/Bache Financial, RBS, Societe Generale Corporate & Investment Banking and UBS.
William Knottenbelt, Managing Director and Head of Futures and Prime Brokerage, RBS, said: 'We view the creation of FXMarketSpace as a natural evolution for the FX market. RBS, as a significant liquidity provider and one of the leading Global FX banks and FX Prime brokers, is well positioned to take full advantage and be at the forefront of this development.'
Other financial institutions, including investment management, hedge funds and proprietary trading firms, are also well represented with more than 10 participants and include Allston Trading LLC, Citadel Limited Partnership, Dsquare, Gelber Group, Getco LLC, Jump Trading LLC, Penson Worldwide and RGM Advisors LLC.
As Early Adopter Program participants, it is proposed that these financial institutions will be involved in the platform's development and will commit resources to and participate in the beta test and launch phases. The participating institutions represent a cross-section of target end users of the platform, including customer and proprietary trading desks at banks, as well as hedge funds and other investment managers.
'Within two months of announcement many of the leading financial institutions in the global FX market have demonstrated that they are both excited and serious about devoting internal resource to back their participation in FXMarketSpace. We greatly appreciate their involvement and look forward to delivering on the benefits,' said Mark Robson, CEO-designate of FXMarketSpace. 'This early support confirms the market's readiness for a more open, transparent and efficient global FX trading platform and FXMarketSpace's unique ability to deliver on that order.'
When launched in early 2007, FXMarketSpace will be the world's first centrally-cleared electronic trading platform for the cash FX market. With the potential to transform the institutional and wholesale FX market, FXMarketSpace will provide credit-efficient access to the over-the-counter (OTC) FX market, order book transparency and total anonymity to market participants. The platform will also deliver greater operational efficiency through its market-leading straight-through processing technology. The FXMarketSpace platform is targeted to meet the needs of banks, financial institutions and non-financial corporations.
While FXMarketSpace is expected to offer a full breadth of FX capabilities including spot, forwards and options, phase one will facilitate spot trading transactions. The initial product offering will be six major currencies, the Euro, Japanese Yen, British Pound, Australian Dollar, Swiss Franc and Canadian Dollar against the US Dollar, as well as four cross-currency pairs.
Reuters and CME also announced that FXMarketSpace has received all necessary antitrust clearances. Formation of the joint venture remains subject to Reuters shareholder approval and other customary closing conditions. An extraordinary general meeting has been convened for July 19, 2006. Certain of FXMarketSpace's activities will be subject to regulatory approval of the UK Financial Services Authority, which is expected in early 2007