Capitolis Goes Live with FX Credit Service

Capitolis has gone live with a foreign exchange credit switching service, Capitolis Switch.

In a release issued today, Capitolis says that its mission is to address capital markets constraints in the financial system and claims that, with the launch of Capitolis Switch, a key credit issue is addressed. The firm says that this service will enable the unbundling of execution, processing, capital and risk in FX prime broking (FXPB).

Capitolis says it is working with Citi, Jefferies and FXCM in launching this new service.

“Large, global, systemically important banks currently provide best in class execution and processing, bundled with credit to clients. With Capitolis Switch, the provision of credit is expanded to include a much broader universe of banks and investors. It allows the large banks to maximise their prime brokerage infrastructure capability and their substantial networks. For credit providers, this is an opportunity to work with new clients, while utilising the scale of processing via the coupled technology of deal processors and Capitolis. The solution effectively brings all of these parties together, for the benefit of the whole market,” the firm says in a statement.

Profit & Loss took a more in-depth look at the Capitolis business model as part of the 2017 Q3 special report, “Prime Services: A Sea of Change”.

Speaking about the launch, Gil Mandelzis, CEO of Capitolis, says: “We are excited to be live with Capitolis Switch and to be working with institutions of the calibre of Citi, Jefferies and FXCM, who have demonstrated their innovative thinking in partnering with us to bring this service to the financial markets. This is a completely new approach to the provision of credit in capital markets transactions. We believe it is the first and important step in Capitolis’ vision to better connect appropriate capital with collaborative technology solutions to accelerate growth and enhance economic performance for all involved.”

“We welcome technology developments that enable new, flexible credit models which strengthen our FX prime brokerage service,” says Sanjay Madgavkar, managing director and global head of FXPB at Citi. “We’re excited by the potential of Capitolis to drive change and are pleased to offer this solution to our clients.”

“Jefferies is committed to making innovative technology available to its clients, and we are thrilled to be a first mover credit provider on the Capitolis platform,” says Brandon Mulvihill, global head of FXPB at Jefferies. “Capitolis provides us yet another tool to add strategic value to our clients.”

Brendan Callan, CEO of FXCM Group, comments: “FXCM has been at the forefront of offering cutting edge trading tools for clients for many years. With this new partnership with Capitolis, we foresee many benefits for liquidity enhancement by the expansion of the credit provision model.”

In March, Capitolis secured two rounds of financing, a Series A investment of $20 million led by Index Ventures, and a prior $9 million seed round led by Sequoia Capital.

Galen Stops

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