ICAP has announced that a year after the launch of its eFix Matching service, volumes transacted through it have been growing steadily. The second major development for the first twelve months is that the line up of currencies has been diversified substantially.
The eFix Matching service is a collaboration between ICAP’s EBS and Global Broking subsidiaries one year after launch. By design it aims to offer an alternative and anonymous access to the fixing liquidity across a number of major ones.
Aside from improved global matching opportunities, the eFix Matching service also provides anonymous access to a central pool of liquidity for the European Central Bank 13:15 Fix, the WM/Reuters 16:00 fix, the Hedge Settlement Rate Australia AUD/USD fix and the Emerging Markets Trade Association USD/RUB fix.
According to ICAP, average daily volumes (ADV) have grown over 160% over the past year. A quarter of the deals executed through the eFix Matching engine are via API, reflecting automated execution trends around fixings.
While a year ago EUR/USD accounted for 76% of eFix ADV, currently its market share has fallen to 46% of total volumes. Trading in the AUD/USD and GBP/USD pairs continues to grow and the company has stated that there are currently over 150 unique active participants.
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Recent months have demonstrated a shift towards earlier order submission, taking advantage of the first-in-first-out (FIFO) eFix policy. ICAP states that the development clears the risk pre-calculation window, resulting in increased fill ratios and improved trader experience.
The successful inaugural year for ICAP’s eFix Matching solution is also an important element of restoring confidence to the currency market. The inter-dealer broker has been deeply involved in the LIBOR scandal, and with the provision of a utility-type solution to the foreign exchange fixings trading, the company could well be on its way to restore its image.
Commenting on the announcement, the CEO of the Global Broking subsidiary of ICAP, David Casterton, said, “Our voice brokers play a major role in building liquidity and momentum. Together with EBS we have successfully brought together our respective customers to execute on the platform which is at the forefront of Fix innovation.”
The CEO of EBS-BrokerTec, Gil Mandelzis, added, “The interest shown by the market demonstrates the need for a global central utility to execute benchmarks in an electronic and transparent fashion.”
“The solution is firmly at the centre of FX market development and importantly works in partnership with our clients to transform and better the way that the Fix is traded in the market, consistent with the FSB recommendations,” he concluded.