NEX has partnered with the China Foreign Exchange Trade System (CFETS), China’s interbank market trading platform and infrastructure provider, to launch ‘CFETS FX2017’ (FX2017), a new trading platform for the Chinese FX market.
Having selected NEX to deliver the underlying technology in June 2016, CFETS launched the first phase of the project with a central limit order book (CLOB) platform for spot CNY on December 4, 2017.
As an anonymous execution capability for the Chinese market, FX2017 is designed to offer market participants access to a central pool of liquidity and a public reference point for spot CNY pricing.
CFETS went live with phase two on February 5, launching a relationship-based platform for CNY trading of spot, forwards and swaps.
Through this disclosed, bilateral trading model, liquidity consumers (LCs) can choose from a range of bank and non-bank liquidity providers (LPs) to access tailored, executable streaming prices.
On the first day of trading, 480 institutions logged on to the new platform with 307 institutions conducting deals. Interbank FX market turnover was $62.8 billion. NEX says that the average daily volume in the first week of trading was “consistently high” and that the new platform “remained robust and stable”.
In a release issued today, the platform provider claimed that the launch is significant, as it supports the expansion and evolution of the domestic renminbi market.
“The next generation technology offers a multi-execution, low latency environment that will encourage a sustainable and healthy ecosystem for its participants,” says NEX in the release.
Zhang Yi, president of CFETS, comments: “The launch of FX2017 is a major upgrade of our financial trading infrastructure. It effectively ensures the safe, stable and efficient operation of the interbank foreign exchange market, enforcing the pricing power of the domestic Chinese market and opening it up to the global foreign exchange market.”
Michael Spencer, group CEO of NEX, says: “NEX has a strong track record of innovation in financial markets technology and I am pleased that we have been able to work with our longstanding partners CFETS, to launch a public market for CNY spot FX and a next generation disclosed trading platform for CNY spot, forwards and swaps. This is a significant milestone in the development of the domestic FX market, and we will continue to support our CFETS partners as they rollout further phases and we explore further partnership opportunities in the future.”
Seth Johnson, CEO of NEX Markets, adds: “I’m extremely proud that NEX Markets has been able to leverage our trading technology expertise to jointly develop FX2017 with CFETS. As a result, the Chinese FX market now has access to multiple execution options in a robust and low latency environment. The launch of this new central limit order book platform in mainland China will play a fundamental role in providing a public reference point for spot CNY pricing in the domestic FX market.”