Centradia, a multi-bank electronic business-to-business (B2B) trading platform for FX and money market products established by four of Europe's largest commercial banks has won approval by the European Commission to commence operations.
Centradia is an electronic B2B trading platform based in London which has been created by The Royal Bank of Scotland, Société Générale, Banco Santander Central Hispano and Sanpaolo IMI. Unlike the global FX platforms, such as FXall and Currenex, which mainly aim at the institutional market, Centradia is primarily targeted at mid-market companies.
While FXall and other multi-bank ventures such as Brokertec remain mired in US anti-trust investigations, the Commission has cleared Centradia from similar charges, saying the banks backing the venture have provided assurances that there is no exchange of sensitive commercial information which could amount to collusive behaviour during the trading process. Participating banks also remain free to sell their financial products via other trading platforms or other distribution channels.
The Commission also notes that the vast majority of FX transactions are still concluded off-line.
But with online trading expected to increase, the Commission was moved to issue the following warning: "The sector of multi-bank trading platforms is evolving very rapidly, and there seems to be a tendency to more consolidation in this area. The Commission will continue to follow these developments very closely."
Currently, only the four founding banks are participating in the Centradia platform, although other participants may be invited to join the venture.