Articles tagged by Nex
Michael Spencer, the group CEO of Icap, claimed to be
“cautiously optimistic” about his firms’ future prospects despite heightened
uncertainty surrounding the macroeconomic outlook for the UK and the global
In a trading statement for the period April 1 2016 to ...
As EBS BrokerTec prepares for the departure of a CEO that has driven so much change at the firm and its transition to being part of Nex, Galen Stops looks at the firm’s evolving role and identity within the FX market.
News that Gil Mandelzis, CEO of EBS Brokertec, is stepping down from the role has triggered the usual speculation over a successor and the business conditions the next CEO will face. Without doubt, the next head of EBS will be taking the reins of a very different company to that inherited by Mandelzis.
Just about 10 months ago the deal was announced to sell Icap’s voice business to Tullett Prebon and at that time, in this column, I suggested that a consequence of that deal would be an easier path for anyone looking to buy Icap’s electronic business, subsequently revealed to be named Nex.
Obviously I cited an exchange as the most likely buyer and it seems, if the headlines of last week are anything to go by, that the pieces are being moved into place. Moving pieces is, however, very different to an actual deal – what are the chances of that?
Icap has acquired Abide Financial, a regulatory reporting specialist with the intention of the company becoming a subsidiary of its Post Trade Risk and Information (PTRI) division, with Collin Coleman, Abide’s CEO, reporting to Jenny Knott, CEO of PTRI.
Following the acquisition, Abide will integrate its regulatory reporting hub and venues with Traiana’s connectivity and Icap’s PTRI Approved Publication Arrangement (APA) reporting service providing PTRI’s client base with a full spectrum of integrated reporting solutions for entities subject to regulatory regimes in Australia, Canada, Europe, Hong Kong, Singapore, UK and the US.
There was a fair amount of chatter about the future of Icap (soon to become ‘Nex’) at the recent Profit & Loss Forex Network Chicago conference, with much of it centering around likely purchasers of the company once it sells its global wholesale broking and information business (IGBB) to Tullett Prebon.
“The other broader question hanging around the firm as it transitions into Nex is whether [CEO Michael] Spencer is priming the new entity for a sale,” Profit & Loss noted in an article published prior to the conference last month.
It seems that many of the attendees of Forex Network Chicago had, in their own minds at least, decided that the answer to this question was that the firm is indeed up for sale. The speculation then turned to who would be interested and able to buy the firm.
NEX Data (Nex Data), a NEX Group business that provides global pricing data and information solutions, and Tradition, one of the largest interdealer brokers in over-the-counter commodity and financial products, announce today that they have agreed a distribution partnership.
Nex Data will become a key distributor for Tradition’s market data and information services division, TraditionDATA. The agreement includes real-time and end-of-day prices sourced directly from Tradition’s global electronic, hybrid and voice broking operations in all asset classes to include: interest rate derivatives, money markets, energy and commodities and fixed income products. It also covers data from Trad-X, Tradition’s electronic trading platform for OTC derivatives, and Tradition Asia, the interdealer broker’s Japanese and pan-Asian division.
Bruce Wolf has left his position as head of Americas sales at EBS.
Although a spokesperson for Nex Group, the parent company of EBS BrokerTec, declines to comment on the news, Profit & Loss understands that Wolf has left after four years at the firm’s New York office.
Prior to joining the EBS sales team in March 2013, where he was tasked with leading the global development and strategic direction of the platform’s bank and broker clients, Wolf worked at Integral Development Corp.
After the Bank for International Settlements (BIS) Triennial FX Survey revealed last year that the industry has shrunk in terms of notional volumes for the first time in 15 years, speakers at Forex Network London outlined the factors that could help this market get back to growth.
During the discussion the speakers on the panel outlined a number of issues that have constrained trading volumes over the past three years, including technology shortcomings, a lack of investment in some areas of the market, and regulatory challenges.
Against this background, the question was put to the panellists, how does the FX industry get back to the kind sustainable growth that it witnessed between 2001 and 2016?
Nex Group has received regulatory approval from the Commodity Futures Trading Commission (CFTC) for a new Swap Execution Facility, Nex SEF (Nex SEF).
EBS is the technology provider to Nex SEF, but the trades are executed on the latter of these two platforms. The new SEF is expected to have onboarded customers and be live for trading in the second quarter of financial year 2017-2018. Nex says that its new SEF will serve as a platform that can be used to launch additional products in the future.
NEX Group (Nex) has announced that its EBS BrokerTec business has been renamed Nex Markets, effective immediately.
Four business lines were created when Nex was launched on 30 December 2016: Nex Markets, Nex Optimisation, Nex Opportunities and Nex Exchange.
EBS BrokerTec previously sat as a sub-brand within the Nex Markets business line. As a result of the rename, Nex will no longer use EBS BrokerTec and the entire business will be known as Nex Markets.
The business will retain its current service names for its FX and fixed income platforms; EBS and BrokerTec.
Glenn Rosenberg has left his position as product director at EBS as part of a wider restructuring at the group under NEX Markets.
A spokesperson for the platform declines to comment, but Profit & Loss understands that Rosenberg left the firm, where he had been working in the New York office.
Rosenberg has been and remains focused on innovation in FinTech, including business development and strategy and product development, according to sources.
He was the FX product development lead and point of contact within EBS for business lines in the product team’s efforts to expand and grow the legacy platform into numerous new product lines.
Speaking at the Profit & Loss Forex Network New York conference, panellists outlined how they think the application of fintech solutions will shape the FX industry going forward.
Nick Solinger, president of FIA Tech, broke down three specific areas where he sees the potential for distributed ledger technology (DLT), or peer-to-peer technologies, to have a major impact on the FX industry.
Firstly, he highlighted how these technologies could change payments systems.
“The current market structure has been the primary limitation in terms of who can provide credit to whom and trade with whom and access the market on the same basis as a large, highly regulated dealer. So there is a focus on improving the payment network, and that will have potential implications upstream in terms of who can trade with whom,” said Solinger.
NEX Optimisation, announced today that participants in its triReduce compression service have eliminated over $1 quadrillion in OTC derivative notional principal since its introduction in 2003.
TriReduce a multilateral risk-constrained compression service that offers compression for cleared and non-cleared interest rate swaps in 28 currencies, cross currency swaps, inflation swaps, credit default swaps, FX forward, and commodity swaps.
Eliminating unnecessary swap inventory can help improve credit risk and capital management, reduces operational costs and risk, improves leverage ratios, and reduces systemic risk.
NEX Optimisation (Nex) has launched a fully automated settlement netting service to streamline the bilateral settlement netting process for market participants.
The service will automate settlement netting of over-the-counter FX trades and will expand to all asset classes in the future.
Settlement failure rates are estimated at approximately 3% for the $1.5 billion that is settled on a daily basis between clients and their dealers. The new service will eliminate the manual process of netting between clients and their dealers by applying an API to communicate with the systems and reconcile payments for clients, banks and custodians.
NEX (Nex) Optimisation has launched an automated credit rebalancing tool that specifically addresses limit over-allocation by prime brokers.
Rebalancer went live across five major ECNs on 2 July 2017, with further platforms going live throughout the year.
Designed in close partnership with Citi, Rebalancer is deigned to enable dynamic allocation of credit across client trading venues, allowing clients to move credit from one platform to another in real time.
Prime brokers currently allocate credit to multiple trading venues but do not have the ability to move it around if there is excess credit on one and a shortage on the other.
NEX Group (Nex) has launched a new cash and collateral movement workflow tool that enables clients to make cash movements and money market sweeps.
Created through the partnership between Nex Optimisation and Nex Markets, the new product, called Pivot, connects the Enso Core platform with Nex Treasury, a cash and FX liquidity management centre for the corporate and bank community. The new service aims to help buy side institutions act on cash insights identified within EnsoCore, a treasury, counterparty risk and portfolio financing workflow platform, to help clients make timely decisions to optimise their overall counterparty relationships, the firm says.
By using Pivot, Nex says that hedge funds will be able to execute cash payments directly through the portal for margin management, manage third party relationships, and invest excess cash in money market funds.
Eva Connors has joined Nex Markets as director of buy side sales for the East Coast of the US.
In this role, Connors will be responsible for client acquisition and retention while representing the various Nex Markets solutions – such as EBS Institutional and Nex Treasury – to the buy side community.
Connors will be reporting into Timothy Johnson, head of buy side sales for the Americas.
Prior to joining, Connors spent 10 years working at FX Connect, initially as a senior sales executive before being relocated to Frankfurt in 2013 to establish a sales team dedicated to Continental Europe. Then in 2015, she moved back to Boston and assumed a role as head of US and LatAm sales for the platform provider.
Duco, a data engineering technology company, has completed a $28m investment round by Insight Venture Partners, Nex Opportunities and Eight Roads Ventures. The round also includes an investment by entrepreneur and former CEO of SunGard, Cristóbal Conde.
Duco provides technology that enables banks, brokers, asset managers and exchanges to normalise, validate and reconcile any type of data in Duco’s cloud, providing firms with on-demand data integrity and insight.
Duco says that it will use the investment to expand its global footprint, with headcount growth in Europe and the US, the launch of an Asia office and an expansion of its product set.
The average daily volume (ADV) for spot FX trading on Nex Markets was $104.9 billion in January, while CME Group handled around $109 billion including FX options.
The NEX data represents a 13% increase from the $93.2 billion ADV it recorded in January 2017, and a massive 60% month-on-month increase.
The volumes being reported by Nex and CME are consistent with a broader trend across the multi-bank platforms that report their volumes, with Hotspot, GTX, FXSpotStream and FastMatch all reporting a spike in trading volumes last month. Indeed, the first of these three platforms all reported record ADV highs in January.
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.
Two and a half years on from acquiring Molten Markets, EBS is beginning to claim some tangible traction amongst the asset management community.
When Molten Markets, founded in 2012 by State Street alumni, was acquired by then-EBS-BrokerTec in 2015, there was a clear logic to both sides of the deal. For EBS, the move was part of a broader strategy to diversify the brokerage’s existing client base, while for Molten Markets being part of a larger, more established company with superior financial resources made its platform a more attractive proposition for the asset managers that it was targeting.
However, while the logic was clear from the start, progress in getting asset managers live on the platform, now branded EBS Institutional (EBSI), has been slow.
It didn’t exactly take Nostrodamus to predict a bid for NEX Group from an exchange operator – even I was all over this in this column in November 2015 when the Tullett-Icap deal was announced, and frankly any opportunity since has been taken to reinforce the logic. It’s simply an inevitable deal and was the day Icap shed its voice broking business. CME may not have it all its own way, though - and what else is likely to be on the table?
CME Group is set to acquire NEX in a transaction valued at £10 per share, consisting of 500 pence in cash and 0.0444 CME Group shares.
The proposed transaction has been approved unanimously by the board of directors of both companies and is expected to close, pending approvals by regulators and NEX shareholders, in the second half of 2018.
"At a time when market participants are seeking ways to lower trading costs and manage risk more effectively, this acquisition will allow us to create significant value and efficiencies for our clients globally," says CME Group chairman and CEO, Terry Duffy. "As one organisation, we will be able to employ the complementary strengths of each company to serve a wider client base while diversifying our combined businesses across futures, cash and OTC products and post-trade services."
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.”
CLS and NEX Group have announced that they are extending the triReduce CLS FX service to third parties. These institutions will participate in the same compression cycles as CLS settlement members.
Financial institutions and multinational corporations that settle in CLS Settlement through a settlement member are now able to join the compression service, benefiting from reduced counterparty exposures.
NEX’s triReduce and CLS pioneered the triReduce CLS FX service to provide risk mitigation services for the global FX market for non-cleared OTC derivative trades. The service combines CLS’s infrastructure and market connectivity with triReduce’s compression expertise.