ABN Amro, Barclays Bank and Standard Chartered are to provide prime brokerage services to corporate currency traders over the Currenex foreign exchange dealing system.
The initiative enables corporate customers to form relationships with just one bank for price quotes, clearing and settlement across the Currenex banking universe, rather than establishing multiple credit lines with individual banks. The service, dubbed Enhanced Market Access, is slated to begin in the new year and is expected to significantly reduce the complexity of dealing for large corporate treasuries.
David Woods, managing director of ABN Amro comments: “EMA takes a set of established and well-accepted market practices and structures, and puts them to new uses in ways that result in greater opportunities for everyone in the market.”
Under EMA, banks become ‘hubs’ on the Currenex system, creating trading gateways to a wide range of ‘spoke’ banks via established inter-bank credit lines. ABN Amro, Barclays and Standard Chartered are expected to be joined by other hub banks in time for the commercial launch of EMA. Currenex says it has so far concluded agreements with 22 spoke banks.
David Blair, managing director of Nokia Treasury Asia states: "EMA takes online FX trading one step further. A multinational corporate will be able to get many more quotes without establishing more credit relationships and can streamline the clearing and settlement of trades."
Currenex's average daily trading is $1.35 billion, according to the latest data from research house Tower Group, one-fifth of the daily value transacted over the leading currency portal FX Connect from State Street. Bank-backed platforms Atriax and FXall bring up the rear with $220 million and $200 million a day respectively.