Higher industry standards are on the agenda for major electronic FX platforms. Thomson Reuters Corporation (TSE:TRI), a leading provider of intelligent information for businesses and professionals, on May 28, 2015, announced the publication of proposed operational procedures for trading protocols on its FXall platforms.
The set of procedures includes a codified Provisory Liquidity protocol that governs participants’ use of ‘last look’ liquidity. The Provisory Liquidity protocol is aimed at enhancing industry standards by outlining clear and consistent eligibility and qualification rules for price makers. In addition, it allows liquidity consumers to make informed trading decisions on the basis of transparent and measurable criteria.
“As a leading independent provider of FX transactions venues, Thomson Reuters is committed to ensuring a confident and effective trading experience for all market participants on all the platforms we operate, while still offering the choice clients need to meet specific trading requirements,” said Phil Weisberg, global head of FX, Thomson Reuters. “Following the new Matching rules we set last year that encouraged high standards of behaviour in primary markets, the updated FXall operational procedures define the same rigorous standards for both our RFQ and Streaming Price trading protocols, where participants transact on a disclosed, relationship basis, as well as our Order Book platform, where participants trade anonymously using either firm or Provisory Liquidity.”
The Provisory Liquidity protocol comes along with behavioural and platform controls that empower participants to choose liquidity sources that best respond to their needs while limiting the impact of physical distance on execution quality. They also entitle qualified market makers to manage credit and operational risk when making price and enable intermediaries to offer liquidity to their customers on a riskless-principal basis, hence enhancing transparency of execution.
“Clients value choice in execution when the choices made available to them are consistently and transparently managed to the highest standard. We therefore designed the new procedures to achieve optimal conditions through a combination of objective and measurable behavioural criteria and platform controls,” adds Weisberg. “More than ever, clients and their liquidity providers seek actionable insight into their execution quality. We provide them with this intelligence.”
The announcement by Thomson Reuters comes at about the same time as a similar announcement also published yesterday by another major in electronic FX trading: BATS’ Hotspot. The platform has unveiled a set of new standards for market makers aimed at providing increased transparency to the global Forex market.
To view the official announcement by Thomson Reuters, click here.