Instinet LLC and Citigroup today announced strong growth in customer adoption and available liquidity in the Instinet FX Cross (the "Cross"), the companies' foreign exchange crossing service, during the first four months of 2004, with $4.3 billion of liquidity in April alone.
During this time, participants in the Cross, saw a record single trading session of over $1billion and the largest single currency transaction of over $300 million.
Instinet and Citigroup entered into a strategic alliance to support the execution of large currency transactions anonymously at a transparent market price in Q4 2002. The currency-crossing platform helps Instinet and Citigroup clients reduce transaction costs by directly matching buy and sell orders at a transparent market price, and with minimal market impact. Liquidity in the platform is provided by corporations, hedge funds and real money investors based in Europe, Asia and North America and has contributed to an average match rate of 30%.
"This platform is arguably the most cost effective channel for FX execution in the market today," said Vikas Srivastava, Managing Director and Global head of FX e-Commerce, Citigroup. "The recent increase in our liquidity has clearly shown the benefits to our clients of a safe and anonymous currency trading environment in capturing substantial cost savings by crossing their currency orders against other buy-side participants."
"Currency traders come to us precisely because we offer anonymity in FX trading," said Michael Plunkett, President, North America, Instinet, LLC. "To our clients who need not just anonymity, but price transparency and minimal market impact, the Instinet FX Cross offers a value unique among electronic FX execution platforms."
Clients who use Instinet's FX Cross to execute currency transactions can reduce their transaction costs by up to 50% in most instances. The Cross reduces the spread and the total market impact of transactions and gives clients the opportunity to realize considerable savings over traditional bid-ask market prices, regardless of size or currency pair.
Instinet manages all order taking and matching functions, with Citigroup acting as credit counterparty on transactions. Clients may elect to have unmatched residresiduals of orders returned to them or have them executed by Citigroup at the same Benchmark fixing. The Cross offers executions in 17 currencies and 3 crossing sessions per day.