Top banks to sound out tech vendors on new FX dealing platform - WSJ

Top banks to sound out tech vendors on new FX dealing platform - WSJ

The world's biggest bank players in currency trading are preparing to sound out technology vendors about building them a new bank-only dealing system, according to the Wall Street Journal.

The venture, dubbed Pure FX, has backing from "most" of the 10 biggest bank players in global forex trading, says the Journal, citing several people familiar with the plans.

The group will approach unnamed technology firms about building the trading platform next week.

Pure FX is a reaction against a decision in 2005 to open up the biggest FX dealing system, Icap-owned EBS, to non-banks such as hedge funds and high-frequency traders.

This has seen the banks lose their dominance in lucrative global FX dealing to nimbler, tech driven competitors. The WSJ notes that, according to the Bank for International Settlements, big banks' share of spot FX trading has fallen to 35% in 2010, overtaken for the first time by "other financial institutions".

According to Journal sources, the banks are not though considering leaving EBS, whose prices are viewed as the industry benchmark.

The top 10 forex dealers, according to Euromoney, are: Deutsche Bank, UBS, Barclays Capital, Citigroup, Royal Bank of Scotland, JPMorgan Chase, HSBC, Credit Suisse, Goldman Sachs and Morgan Stanley.

Banks Bid to Regain Forex Market Clout - WSJ (subscription)

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