Four international banks have teamed up with Fenics Software to provide the first multi-dealer currency derivatives platform to target the end user community. Bank of America, Credit Suisse First Boston (CSFB), Société Générale and UBS Warburg will provide options pricing, volatilities and analysis via a new Internet-based service that promises to improve price transparency and market liquidity.
The online service, due for launch at the end of June, will replicate many of the features currently available on Fenics. “The Internet means low cost of delivery and ownership ‘ and opens up an exciting new delivery mechanism for our core value proposition,” says John Ashworth, chief executive of Fenics.
The four banks will provide near real-time quotes for customers who access Fenics online via a monthly subscription. End users will be able to price and analyse a full range of currency derivatives, including both vanilla and exotic options, across a large number of currencies using the traditional Fenics pricing products and information provided by the alliance.
While there is no trading facility at the moment, Ashworth says that this is a distinct possibility.
The partners believe the online service will lead to wider use of options by end users. “Up until now, Fenics has serviced 92% of the top and middle tier of the market. But there is an appetite emerging among end user consumers, non-bank financial institutions, fund and asset managers, corporates and even high net-worth individuals, to be able to play on the same level. If a corporate or smaller end user can access the same playing field as a mid-tier bank, then we’re creating a tool for price transparency, which increases liquidity,” says Ashworth. “The power is shifting from the providers to the consumers.”