France’s Tradition has announced that it is launching a new entrant in the spot FX ECN business, traFXpure. The new venture will be supported initially by FX banks Barclays, BNP Paribas, Deutsche Bank, Royal Bank of Canada and UBS, with additional banks expected to be announced over the next few weeks.
As reported by Peter Garnham in Euromoney FX News, traFXpure is “a response from some of the biggest FX banks to the failure of EBS to nullify the predatory behaviour of some FX participants on its platform, where high-frequency traders (HFTs) have had an unfair advantage from a technology and market data perspective.”
It should be noted that Tradition is effectively already a participant in the retail FX business, via its 49% ownership of Gaitame, one of Japan’s largest retail FX firms. As we reported earlier, Gaitame does about $55 billion per month of trading volume.
ICAP-EBS has seen its spot FX trading volumes fall the past few months, as industry volumes slow across the board and as, in our estimation, they continue to lose market share to other competitors such as FXall, Hotspot FX and Currenex. The increased competition in the Forex ECN business has also brought about tighter pricing, meaning lower per-volume margins for the ECNs. ICAP recently named a new management team for its EBS unit, led by new EBS CEO Gil Mandelzis.
For more on the global FX market see the LeapRate-Dow Jones Forex Industry Report.