Lava to launch interbank FX trading platform

Lava to launch interbank FX trading platform

Citigroup subsidiary Lava Trading is gearing up to launch an electronic interbank foreign exchange trading platform. The news comes just days after the US bank sold its stake in the EBS currency trading system.

The Lava interbank platform is due to launch later this year and will compete directly with EBS and Reuters in the lucrative spot market.

Lava says the new platfom, which will be available via the Internet or leased lines, will be based on its proprietary technology and will provide the interbank community with a range of sophisticated order types, full depth of book and enhanced functionality, including anonymous trading.

The platform will also feature a new "blind" system to allow the biggest banks to shift large positions quickly and quietly among themselves.

Reuters was understood to be canvassing support among the top six FX marketmakers for a similar exclusive interbank platform late last year, in the face of growing disquiet at EBS' decision to open its system to hedge fund participants.

David Ogg, CEO of LavaFX, comments: "Lava's platform will provide unique functions and advanced order types, and superior methods of harvesting liquidity, providing the interbank community with offerings that are used extensively on the buy-side. We are confident it will prove to be a truly cost-effective solution, leading to faster and greatly improved interbank trade execution."

News of the new platform comes just days after Citi sold its stake in bank-backed FX dealing system EBS, which is being acquired by interdealer broker Icap. Citi was one of the 13-member bank consortium that launched EBS in 1993 as a bank-backed rival to Reuters' electronic matching system.

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