China Foreign Exchange Trade System chooses ICAP’s EBS BrokerTec

ICAP plc (LON: IAP), a leading markets operator and provider of post trade risk mitigation and information services, announces today that China Foreign Exchange Trade System (CFETS), China’s official inter-bank market trading platform and infrastructure provider, has chosen ICAP to deliver the underlying technology for fixed income and Forex electronic execution services in mainland China. The technology will be delivered by EBS BrokerTec, ICAP’s market-leading electronic FX and fixed income business, which will form part of NEX Group plc, following the completion of the transaction with Tullett Prebon to dispose of ICAP’s global hybrid broking and associated information businesses.

An important infrastructure service provider, CFETS has been planning its “Next Generation Trading System” (NGTS) for a number of years. ICAP was chosen to cooperate with CFETS on the core trading components of NGTS. Leveraging the underlying technology behind EBS Market, EBS Direct and BrokerTec Direct, the NGTS will enhance CFETS’ capability to offer central limit order book (CLOB) and disclosed trading models for FX spot, forwards and swaps and a disclosed trading model for cash bonds, to the onshore renminbi market, through a localised EBS BrokerTec Graphical User Interface (GUI).

The deal, valued at $65 million over a three-year period, will see ICAP expand into China, a key growth market for the business, with EBS BrokerTec establishing a local office and development centre in Shanghai.

CFETS and ICAP have collaborated successfully for more than nine years since the founding of Shanghai CFETS ICAP – a joint venture to provide broking and information services in the onshore and offshore interbank foreign exchange, money market, bond and derivatives market. This partnership is the next chapter in a long-established and successful relationship and allows EBS BrokerTec to accelerate its product development.

“ICAP has invested meaningfully in financial technology over many years, which will continue to be part of the NEX Group plc strategy. Our EBS BrokerTec business has a strong track record of innovation in the development of electronic OTC markets”, said Michael Spencer, Group CEO of ICAP. “China is an extremely important financial market and we are honoured that our long term partner, CFETS, has asked us to collaborate with them to build a significant platform which will play a key role in the future of the renminbi (RMB).”

Xu Zaiyue, Executive Vice President of CFETS stated:

“I am glad that as our partner, EBS BrokerTec is helping us to achieve our goal. I firmly believe NGTS will become one of the most important infrastructures of China’s RMB market and provide strong and steady support to the development of China’s inter-bank market and globalisation of the RMB.”

Gil Mandelzis, CEO of EBS BrokerTec said:

“This is a hugely exciting project for EBS BrokerTec and we are looking forward to working with CFETS to shape market development in the Chinese FX and fixed income trading markets. CFETS’ decision to use EBS BrokerTec technology to launch NGTS is a resounding endorsement for the quality of our technology and our role as a trusted provider of trading infrastructure and venues globally, across multiple asset classes.”

CFETS, founded on April 18, 1994, is run by the People’s Bank of China (PBC). Its core functions include: providing trading, information, benchmark and training facilities to the interbank lending, bond and FX markets, monitoring market transactions, providing services for the operation and transmission of the central bank’s monetary policies, and engaging in other businesses authorized by the PBC.

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