CME and Thomson Reuters dump FXMarketSpace JV
10 October 2008 | 8860 views | 0
CME Group and Thomson Reuters are closing FXMarketSpace, the centrally-cleared foreign exchange marketplace established last year, after the venture failed to attract the liquidity levels expected.
In a statement the firms say all trading on the FXMarketSpace platform will be suspended at the close of business on 17 October.
The partners launched the 50:50 joint venture in March 2007, with Reuters providing trading access, trade notification and market data distribution and CME offering clearing and trade matching services.
At launch it was expected that FXMarketSpace would need to capture two per cent of the $2 trillion over-the-counter foreign exchange market to achieve break-even. But the venture failed to attract the interest the two parties had hoped for and volumes stopped being reported late last year.
Commenting on the closing of the venture, a Thomson Reuters spokesperson says: "Our initial JV agreement provided for financing up until the company became profitable during 2008. We took a view that the liquidity levels by Q3 did not indicate that this goal would be met: with our responsibilities to our shareholders and other stakeholders, we decided not to continue."
CME and Thomson Reuters say they will now work closely with FXMarketSpace over the next few months to "ensure an orderly wind down" of business.
The companies will also explore working together "to pursue clearing and operational efficiencies for their customers".