FXMarketSpace, the centrally-cleared foreign exchange marketplace established by Reuters and the Chicago Mercantile Exchange (CME), is now live and fully operational, with customer numbers "significantly ahead of expectations".
The partners said last May that they were forming the JV FXMarketSpace, with Reuters providing trading access, trade notification and market data distribution and CME providing clearing and trade matching services. The two companies have each invested $45 million in the scheme and need to attract two per cent of daily FX volume to break even.
FXMarketSpace starts operations with 76 customers either trading live or in the process of joining, and a total of 12 clearing prime brokers already operational. Reuters says an additional eight clearing prime brokers are expected to join the platform soon.
The system allows anonymous trading in spot foreign exchange against the dollar on the euro, yen, sterling, Australian dollar, Swiss franc, Canadian dollar and four cross-currency pairs.
Reuters says customers have successfully tested both their ability to connect to and use FXMarketSpace and have recently started to trade actively in a live environment.
Commenting on the launch Reuters CEO, Tom Glocer, says: "FXMarketSpace represents the next step in the evolution of the FX markets, directly in response to customer demand. It brings innovations including central counter-party clearing, more efficient credit handling, anonymity and raw speed."
Glocer believes the project could be as big for Reuters as Instinet, the electronic communications network which the news and information group sold for $1.9 billion in 2005.
Mark Robson, CEO, FXMarketSpace, says the arrival of the service "means that the doors are now open for a broader and more diverse range of institutions to participate in the global FX market".
With its deal matching engine physically located in Chicago, FXMarketSpace is clearly targetting a new generation of black box program traders and hedge funds operating out of the Windy City. Hedge fund participation in the curency markets has been a key driver behind the recent surge in daily FX volumes.
Reuters' rival Bloomberg last week launched an anonymous insitutional FX dealing platform under the Tradebook banner.