CFOWeb.com, developed by Palo Alto, California-based Integral Development, went live on 27 June with 2,500 asset management members on board. Harpul Sandu, founder and CEO of Integral, says that the trading site boasts around 4,000 members and nine trading banks, including Dresdner Kleinwort Benson, ING Barings, Bank of Tokyo-Mitsubishi, ABN Amro, AIG International, BNP Paribas, Bank of America and Standard Chartered.
As a business-to-business e-commerce portal for corporate treasurers and fund managers, CFOWeb is free for users and provides independent pricing for treasury products, portfolio analysis and management and direct online trading of swaps, caps and floors, forward rate agreements, forex, loans and deposits and cash instruments. Investment banks and financial services are given an online presence for a undisclosed fee. “CFOWeb is a multi-product, multi-bank, multi-service site for the buy-side,” says Sandu.
Initially, CFOWeb handles FX, derivatives and money market products, and provides portfolio and risk management services to its members. Integral is now waiting for a broker/dealer licence to trade in the fixed income and equity markets, Sandu says.
ABN Amro was one of the first investment houses to join CFOWeb.com after its involvement was announced earlier this year. David Woods, managing director and head of e-commerce at ABN Amro in London, says that when the bank first signed up to take part in CFOWeb.com, it was a new venture which presented “pretty low risk and low cost” to join.
CFOWeb works on a “reverse auction” pricing basis, says Sandu. Buyers post the price at which they want to buy an instrument and participating banks will try and match at the best price. Counterparties are known to each other at the time of the trade. “We did not want to deal with the complex issue of anonymity,” adds Sandu.
Woods says that the somewhat delayed launch of CFOWeb.com was caused by an under underestimation of the workload involved in setting up the portal.
“There is more to building an infrastructure than just building a network,” notes Sandu. “We had to have all the banks online, then all the members. Then we had to wait for the feedback from the banks and members and test the feedback and all the electronic links [before going live].”
Sandu claims that despite CFOWeb’s delayed launch, Integral is now “at least a year ahead” of the competition in terms of product scope and technology development due to the length of the testing phase.
ABN Amro plans to stay involved with CFOWeb.com, but not exclusively. Woods says the bank will not rule out becoming involved in other multi-bank Web initiatives. He predicts that large corporate traders will employ “crawl agents”, Internet tools to search out the best prices on Web-based trading services, and commingle them on a proprietary, browser-based front end.