The announcement by BNY Mellon this week that it is launching an FX prime brokerage (FXPB) service is interesting for a couple of reasons.
Superficially, it bucks a trend that has developed in recent years of banks scaling back, or even shutting down, their FXPB businesses. However, Profit & Loss already argued in a special report looking at prime services published in Q3 2017, that this trend was beginning to reverse itself.
So perhaps more significant is that it indicates that the barriers to entry in FXPB have been lowered as the cost of technology and infrastructure has both decreased and become more available.
CLS has announced today that the first Japanese-domiciled funds have access to CLSSettlement as third-party clients.
Asset manager Fidelity International and The Master Trust Bank of Japan (MTBJ), a trust bank exclusively engaged in asset management, have the first Japanese-domiciled funds to settle FX transactions in CLSSettlement. CLS says that this marks the start of a coordinated industry-wide effort to onboard the Japanese buy-side community to its settlement service over the next few years.
Fidelity International and MTBJ are being supported by Brown Brothers Harriman (BBH), which acts as MTBJ's custodian for non-Japanese securities and related currency movements outside of Japan. BBH has made its third-party access to CLSSettlement available to facilitate MTBJ's settlement of FX transactions.
IHS Markit has announced that MarkitSERV will now offer integration with BidFX, an execution management system (EMS), for straight through post-trade processing of FX trades.
In working with BidFX and other FX trading venues on its network, MarkitSERV aims to deliver a comprehensive, flexible straight through processing (STP) solution for FX trading, which includes a hosted service to disseminate trades from execution venues to clients’ internal trade capture and risk systems. The low latency service is designed to eliminate manual trade booking and provides real-time trade notification, position and P&L updates, confirmation of dealt trades, and enhanced operation and risk control.