New Change FX (NCFX) has been approved by the UK’s Financial Conduct Authority (FCA) as the first benchmark administrator for live FX spot markets under EU Benchmark Regulation 2016/1011.
NCFX produces live, consolidated, registered spot benchmarks for FX market customers.
“The introduction of the NCFX benchmarks means that live FX execution can now be benchmarked against a recognised rate. FX deals can therefore be executed and benchmarked as they arise, rather than waiting for fixing windows. This gives freedom and flexibility to investors and their executing banks. NCFX benchmark rates are calculated 20 times a second so market users can act in the market whenever they choose, rather than being constrained by benchmarks that are calculated infrequently,” says NCFX in a release issued today.
The benefit of this, claims NCFX in the release, is that it enables market participants to measure their costs against a “recognised and independent” data feed. For example, the firms says that this could help asset managers by providing certainty that the reported costs are accurate.
Andy Woolmer, CEO of NCFX, says: “The main impact of a live, independent spot benchmark is that customers of banks and brokers now have an officially recognised way of understanding costs on live transactions, which will lower their execution costs. Customers no longer have to use fixing windows to achieve an objectively measured FX rate. This creates freedom to use flexible approaches to execution and allows banks to offer new products. The NCFX rates can be used in any situation where an objective FX rate is required, and of course they enable users under reporting obligations to report costs against a rate that won’t cause regulatory problems at a later date”.