Credit Suisse First Boston (CSFB) has released Prime Trade FX, another part of the Prime Trade suite of online products to be released globally to third party customers outside the CS Group of companies.
Prime Trade originally launched as a listed derivatives service about two years ago, but the system was expanded to include currencies and fixed income products last year. The latest release boasts increased functionality on the clearing side, as well as post-trade features such as settlement and a sophisticated reporting package. The new version also provides access to CSFB’s prime brokerage business.
The FX module officially launched in late December and currently has around 15 customers and rising, according to Ben Cohen, head of fixed income and derivatives e-commerce for CSFB in New York. Cohen believes this will easily number around 100 by the end of the quarter, now that Y2K concerns have abated.
Philippe Buhannic, who is responsible for fixed income’s e-commerce marketing, believes e-commerce will become the most important distribution tool for banks. Besides research and the electronic communications lines, Buhannic says customers are most interested in the speed of pricing and execution. “With Prime Trade FX, there is very fast online credit checking, there are no limits for size, and we cover a wide range of products – spot, swaps and forwards,” he adds.
All prices are dealable, two-way prices that are broadcast constantly. “This is not glorified email. Customers can deal in real-time and transactions are confirmed within seconds,” says Buhannic.
Customer interest began with CTAs and money managers, but is beginning to draw in more and more small banks, according to Buhannic. “We’ve discovered a niche with small banks in Europe, because these institutions don’t always have complete market making coverage, but do have genuine business to transact,” he says, adding that Prime Trade will soon be extended to the corporate treasury market.
Prime Trade FX covers the actively traded G20 currencies. The next phase will be to extend the FX module to include emerging markets currencies and NDFs. During upcoming months, CSFB will rollout additional modules so third party users will soon be able to view several different asset classes on a single screen, explains Cohen.
“We want to differentiate ourselves by the multi-product nature of Prime Trade,” says Cohen. “Customers will be able to build single product pages or composite pages where they can mix and match different products. So a client will be able to execute as many as three legs of a deal simultaneously on a single page. This is a big selling point and will increase as we continue to add products.”
Another scheduled release is an application programming interface (API), which should be available by March. “The API will allow us to seamlessly communicate with our customers, who can trade and clear in a single window,” says Buhannic.
The service also has a back office facility that allows customers to see their trades and positions in real-time. Cohen says Prime Trade offers straight-through processing (STP), something that isn’t widely available in FX. “Given the high numbers of tickets between customers, the ability to have front to back office automation means a significant cost savings,” says Cohen, “And we will be releasing a new version of our existing system by the end of February.”
“Prime Trade is an overall risk reduction system, providing an STP solution. It has prices, limits, and order and position management, all of which can be exported directly to the back office,” adds Buhannic.
“We may not have been the first to market in FX, but we are working to deliver a very sophisticated product. We want to differentiate ourselves by giving clients robust functionality on their desktop,” says Buhannic.