Broker and market platform owner ICAP is to launch a service designed to help shift the big voice-based orders at the centre of a currency market manipulation scandal to a more transparent electronic system. ICAP will offer incentives to its voice broking team to push orders onto the new service, an ICAP spokeswoman said on Tuesday, the first initiative by a big financial company to try to resolve some of the issues raised by the market manipulation row that broke out last year.
Banks say ICAP, whose EBS platform along with Thomson Reuters are the biggest electronic trading venues for major currencies, and some of its competitors have been working for some time on proposals to provide alternatives for executing orders around the fix.
They say that getting large client orders onto a single, anonymously-traded venue could help resolve some issues raised by the scandal. Some senior bank traders are alleged to have used such big orders improperly to move prices around the benchmark fixing sessions.
Other substantial problems would remain, chiefly around how to resolve those orders that cannot be matched off against others while still creating a central reference price for the millions of contracts world-wide that use the fixes as a reference point.
"EBS is working with the voice team to create a product that will become a deep pool of electronic liquidity for fix execution in the FX market," ICAP spokeswoman Serra Balls said.
"It's a fully auditable, fully accountable way of matching the orders at the fix rates." Voice brokers match buyers and sellers of bonds, currencies and swaps by telephone. Thomson Reuters Corp said last month it was proposing changes to its foreign exchange trading rules and implementing controls it hopes will minimise the scope for market manipulation and abuse.
Comments
Comments are closed.