18 April 2015

Thomson Reuters bids to ward off FX predators with new spot matching rules

25 March 2014  |  3320 views  |  0 stock quote

Thomson Reuters is proposing changes to spot matching rules on its FX trading platform in an effort to ward off 'phantom pricing' tactics deployed by high-speed trading firms.

Thomson Reuters says that the new rules will "discourage abuse, manipulation or disorderly conduct, as well as behaviours that do not enhance liquidity for the market as a whole".

The updated platform controls will include provision for 'Minimum Quote Life' to give counterparties a fair chance of trading all orders placed on the book, and a 'Minimum Tick Size', designed to help achieve the right balance between tight spreads and stability of prices. The changes also introduce a proposed randomisation of order processing, to be run in a selected currency pair.

Phil Weisberg, global head of FX, Thomson Reuters, says: "Through a combination of platform controls and behavioural rules, the new updated Rule Book will seek to enhance liquidity for all clients trading on Thomson Reuters Matching. The proposed rules are based on feedback from detailed consultations with the market through the past year."

Rival FX platform, Icap-owned EBS last year introduced new trading rules across its own matching platform in an effort to curb abuses by high-frequency trading firms.

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