360T has revealed that it officially launched its undisclosed marketplace, 360T ECN, in April.
The firm claims that the new ECN will enable access to additional liquidity and trading styles, adding another complementary execution mechanism to its OTC FX trading offering.
Carlo Koelzer, CEO of 360T Group, says: "With the introduction of 360T ECN, our clients can take full advantage of accessing the entire variety of liquidity. Considering new regulatory and capital requirements, our ECN is the right solution for the future FX ecosystem, including the facilitation of the credit mitigation.
If there’s one thing that has become abundantly clear over the past few years, it is that many OTC platforms have decided that they need to scale their businesses up and out in order to be successful in today’s FX market.
This was made abundantly clear in a press call today when Terry Duffy and Michael Spencer, respectively the CEOs of CME Group and NEX Group, talked about the logic behind their $5.4 billion tie-up.
“Effectively, what we’re building is a bigger supermarket,” said Spencer. “Why do people shop in supermarkets? Because it’s convenient to buy everything in one place.”
So the big news this week was that 360T has agreed to buy the GTX ECN for $100 million. This is obviously an interesting deal in a number of ways, and here are some of my initial thoughts.
Firstly, let’s look at the price per $1 billion of spot FX average daily volume (ADV).
We did a very rudimentary analysis of this when Deutsche Börse announced the purchase of 360T back in 2015 and found that it paid about $11.36 million per $1 billion dollars of spot FX ADV, compared to about $12.7 million per $1 billion of ADV paid by then-BATS Global Markets for Hotspot.
Regular readers will know I am unsurprised to read reports of Blackstone pondering the sale of FXall once it completes its takeover of a majority stake in Thomson Reuters F&R, because (for once, I know, before you all message me) I predicted such a thing in this column in June.
What I find interesting in the latest production from the rumour mill is how it is only the sale of FXall – Matching and the other channels are not mentioned.
The FX market is still “completely under-futurised” right now, according to Carlo Kölzer, CEO of 360T and global head of FX at Deutsche Börse Group.
Deutsche Börse announced plans to buy 360T in 2015 and this deal can subsequently be viewed as part of a broader trend of large exchange groups buying OTC FX platforms.
This begs the question of whether these exchanges will try to replicate the “vertical silo” model that they have developed in other markets, whereby they effectively manage to keep customer transactions within their business silo for the entire lifecycle of the transaction by offering pre-trade data and analytics, execution and post-trade clearing and settlement services all in one venue.
ABN AMRO Clearing today has started clearing Eurex FX futures and options for its clients.
The group now provides immediate support for the “classic FX” derivative contracts with attributes including monthly and quarterly expiries, as well as the rolling spot futures product that is now live.
“Our clients have made our decision to support the Eurex FX exchange traded derivatives offering very easy,” says Michael van Dijk, global product manager, FX, at ABN AMRO Clearing. “We consistently post over 20% market shares of transactions cleared on most relevant derivatives exchanges globally.”