The platform provides an FX aggregation service across a range of banks to clients for the purpose of executing spot FX trades. Banks connected to FXSpotStream that will serve as liquidity providers include six of the top-15 banks in this year’s Euromoney FX survey: Bank of America Merrill Lynch, Citi, Commerzbank, Goldman Sachs, HSBC and JPMorgan. By not charging brokerage fees to either clients or liquidity-providing banks, FXSpotStream aims to attract business away from other brokerage-charging platforms, such as FXall, 360T, FX Connect and Hotspot. It is a subsidiary of LiquidityMatch, in which most of the participant liquidity-providing banks are shareholders.
"Early client feedback about FXSpotStream has been very positive," says Svante Hedin, managing director and global head of FX ecommerce trading at JP Morgan in London. "The appeal of FXSpotStream is that it offers fast and transparent price aggregation and a reduced cost of execution for both JPMorgan as a liquidity provider and for our clients."
FXSpotstream has been pitched as a market utility, providing the infrastructure that facilitates the multibank API and the associated routing mechanism to route trades from clients to liquidity providers. Access is via its three co-location sites in New York, London and Tokyo, and they are all currently up and running.
Following the launch of FXSpotStream some seven months ago, a host of ECNs have launched over the early part of the summer. Tradition’s traFXpure, which launched in late May, is targeting the interbank and professional trader market, and will look to challenge the established order of EBS and Reuters in that segment.
Other platforms, such as FXCM and Credit Suisse’s FastMatch, are creating a liquidity pool from aggregated retail volumes, institutional investors and non-bank market makers. FXCM recently acquired a stake in Lucid Markets, one of the world’s biggest FX high-frequency trading firms.
Molten Markets, which was set up by one of the architects of State Street’s FX Connect, Simon Wilson-Taylor, opened for business last month and is said to have appeal to real-money investors.
Other ECNs to launch include Cürex FX, smartTrade Technologies’ LiquidityFX, Jiffix Markets’ JFX.com and tpSpotdeal, by Tullett Prebon, and Integral Development, which will offer simple, reliable execution and will offer anonymous trading with a prime broker as central counterparty for all trades. The venture has provided no further details on the offering.