EBS, the world's leading provider of electronic trading and market data solutions to the interbank FX community, has announced it is open for business in China.
As part of this, EBS has secured its first agreement with BMO Bank of Montreal for access to EBS Spot.
Recent research shows that China has 175 foreign banks, 110 city banks, 1,000 urban credit co-operatives, 35,000 rural credit co-operatives1, many of which require access to the global FX market. Banks which do not have sufficient credit, or for whom FX is not a core business can get access to EBS Spot liquidity through one of the approved EBS Prime Banks.
China's businesses have made significant deposits of foreign currency in Chinese banks over the past decade, while the Chinese government has chosen a proactive approach to attract onshore foreign currency deposits.
Evidence from the Bank for International Settlements reveals that 95% of foreign currency deposits in China are made in US dollars2. The majority of the world's FX interbank trades for US dollars are conducted using the EBS Spot dealing system.
EBS' research has shown that FX traders universally regard price, depth and liquidity as being of paramount importance. EBS Spot offers single screen access to all the major currencies, with exceptional liquidity and cross rates for the major currencies including EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD and AUDUSD.
Bank of Montreal has a long history with China dating back to the early 1800s when the business completed its first FX transaction helping the New England states finance their growing trade with China.
This support for trade with China grew when Bank of Montreal became one of the few North American banks to finance trade transactions in China during the 1960s. It was the first Canadian bank, and the third from North America, to be granted a branch license in Beijing.
Rod Jones, Executive Managing Director, International Capital Markets, Bank of Montreal, said: "With branches in Beijing, Guangzhou, Hong Kong and a representative office in Shanghai, Bank of Montreal is committed to supporting Chinese companies and financial institutions in their dealings, and maintaining its premier position in the FX market."
Mark Monahan, Head of Global Sales and Service, EBS, said: "This is a pivotal development for global FX trading. The increased activity in FX in China over recent years reveals a clear need to get access to optimum liquidity and pricing in the major currency pairs.
"EBS Spot is the real market for the major currencies as we have more counterparties and trading floors than any other FX interbank trading system and will enable Bank of Montreal to enhance their FX services to their clients in this important emerging market."