The Bank of New York is to join multi-bank currency portal FXall. The proposed online foreign exchange trading system has also announced alliances with eight technology firms.
Joining as an equity partner, The Bank of New York is to provide its Internet-based trade order management system, developed in partnership with AVT Technologies of the UK, as the technology platform for the venture.
The recruitment of BNY raises the market share commanded by FXall member banks to approximately 34% of the global market. The fourteen member FXAlliance group is competing with rival platform Atriax - established by Deutsche Bank, Chase Manhattan and Citibank - which commands 50% market share. Both groups are developing trading portals for corporates to compare FX prices and transact online.
FXall says the addition of BNY's technology will expedite the delivery of its trading platform. The group also announced alliances with eight technology solution suppliers, including AVT Technologies, in a bid to rapidly build connectivity to prospective clients and providers.
Other technology partners, include:
Cognotec, which will deliver liquidity through a link to its ASP-based FX trading platform;
FNX, which is to integrate its Sierra Suite of real-time risk, processing and settlement services with FXall's trading platform;
Reuters, to ensure that the large installed base of Mercury FX users will be able to move orders seamlessly in and out of the FXall system;
SAP, which will provide FXall trading interfaces from its corporate ERP solutions;
Trema, which has agreed to provide an interface from its Finance KIT treasury & risk management software;
Wall Street Systems, which is to integrate the front, middle and back office functionality of the Wall Street System with the FXall trading portal;and
Andersen Consulting, which has been contracted to act as the lead integration provider managing the overall project.
"The development of pre-to-post-transaction processing that FXall has undertaken with the announced business relationships will ensure that the FXall platform is on the cutting edge of meeting customer needs," says Philip Weisberg, interim CEO of FXall.
The consortium has also secured a second round of investments from six of the top global FX providers, including Bank of Tokyo-Mitsubishi, BNP Paribas, Dresdner Kleinwort Benson, Royal Bank of Canada, The Royal Bank of Scotland and Westpac. They join the original seven FXall founding banks - Bank of America, Credit Suisse First Boston, Goldman Sachs, HSBC, J P Morgan, Morgan Stanley Dean Witter and UBS Warburg.
The alliance also revealed the first members of a Customer Advisory Board (CAB), comprising a cross-section of active non-bank currency market participants. The CAB currently includes American Century Investments, Cathay Pacific Airways, Cisco Systems, Government of Singapore Investment Corporation, Hewlett-Packard, Levi Strauss & Co., Mitsubishi, and Oracle among others.
Weisberg says that both the Customer Advisory Board and technology providers have been working with the Board of Directors and management of FXall over the past few months to move the service towards launch scheduled for early next year.
"FXall is indicative of the future direction of foreign exchange processing," says CAB member Geri Westphal, CFO and treasurer of Oracle. "One-stop, on-line trading, combined with straight-through processing will allow for substantial time savings and greater efficiency."