Beta testing is the next phase of the landmark agreement announced in May by CME and Reuters to bring the professional interbank FX market direct futures trading by offering CME’s electronic foreign exchange (eFX) markets to Reuters' global customer base in a spot equivalent format. The agreement marked the first major linkage of sell side traders in the interbank FX market to CME eFX futures markets, where hedge funds and other major buy side participants play a major role, paving the way for more dynamic and efficient markets.
The service will initially be available in theUnited Kingdomand U.S, followed by rollout to additional markets inEurope,AsiaandNorth America. Both in-house FX traders and clearing firms for non-member Reuters customers will be able to trade CME eFX futures on Reuters flagship foreign exchange trading platform Reuters Dealing 3000.
“With notional value averaging as much as $27 billion per day this month, overall volume in CME’s FX markets is up almost 40 percent and volume in our electronic FX markets has more than doubled since 2003,” said Rick Sears, CME Managing Director, Foreign Exchange. “We are thrilled that so many of the world’s leading financial institutions not only recognize the potential of gaining direct access to CME’s FX futures markets via their Reuters Dealing 3000 terminals, but are willing to devote their own time and resources to help test our systems and ensure a successful launch of this growth initiative. We are gratified that we can partner with our clearing firms to offer CME eFX futures access to the approximately 3,500 non-member institutions who are Reuters Dealing 3000 customers.”
“Providing executable CME currency futures rates on Dealing 3000 is the latest way in which Reuters is delivering added value to its clients,” said Michael McCorkle, Reuters Treasury Business Manager. “This initiative will provide Reuters customer base with easy access to another significant pool of liquidity with relevance to institutions of all sizes. By making both cash and futures trading available on one desktop, Reuters is actively taking part in the changing nature of the foreign exchange market.”
Allan Zavarro, ABN AMRO Global Head of Futures, stated, "ABN AMRO's participation in the Reuters/CME partnership furthers our objectives of being one of the leading multi-asset class clearers, and one of the largest clearing firms on the CME."
Robert Valdes-Rodriguez, ABN AMRO Global Head of FX Distribution, added, "The launch of CME FX on Reuters will further increase the efficiency and liquidity of the global FX marketplace."
This joint initiative will significantly expand CME’s distribution of its FX futures markets and extend Reuters product coverage beyond its successful spot and forward foreign exchange product lines. Reuters matching and dealing communities, representing 3,500 institutions located in 123 countries, will have direct access to CME’s eFX futures markets. For the first time CME’s eFX futures market will be directly accessible by a significant cross section of the interbank FX spot trading community.
Under the agreement, CME’s eFX products, traded on its GLOBEX® platform, will be easily accessed via Reuters Dealing 3000 desktop with straight through processing of trades in Reuters Ticket Output Feed (TOF) standard. Quotes on CME’s eFX products will appear in spot (or cash) equivalent terms to further ease usage for cash market participants by facilitating price comparisons between the two markets, potentially bringing greater pricing efficiencies to both. Because of the financial guarantees provided by CME’s Clearing House, banks will also be able to trade with non-bank participants in a credit-enhanced environment. In order to facilitate the order execution and risk management, Reuters and CME have selected FFastFill as one of the vendors to provide the related services.
Chicago Mercantile Exchange, the largestU.S.futures exchange, provides the world’s largest regulated marketplace for foreign exchange trading. CME offers 36 different foreign exchange products, including U.S. dollar-denominated and cross rate products. CME’s FX contracts were the world’s first financial futures products when they were introduced in 1972.
Reuters, an international leader in financial information and analytics, which serves 427,000 financial professionals worldwide, provides the world’s leading FX platform for institutional spot and forwards trading. CME and Reuters previously collaborated in the late 1980s and early 1990s to pioneer electronic futures trading through the original GLOBEX system.
