It took them a while to admit it, but the CME and Thomson Reuters have finally got around to confirming the news broken here a month ago that their 50/50 joint venture FXMarketSpace (FXMS) will close.
The companies say that all trading – which is not a lot to be honest – on the platform will be suspended at the close of business on October 17, 2008. During the coming months, CME and Thomson Reuters will work closely with FXMS to ensure an orderly wind down of existing business operations.
Given the heightened credit concerns in the wider financial markets, it probably came as a surprise to its owners that FXMS failed ever to attract any significant volumes. Almost from its first day, many in the FX market harshly rechristened the platform FXWasteofSpace and they were never convinced about the merits of trading spot FX through an anonymous central counterparty. It may well have been different for FX swaps – especially in the current climate. But although it said it would launch these, FXMS never did.
Ultimately, both of its parents will probably feel that the launch of FXMS was a gamble worth taking. But, with the benefit of hindsight, it appears that the platform was always doomed.