Citi Confirms it's Cutting Ties with Majority of FX Platforms

After launching a review back in October of last year, Citi has confirmed that it is reducing its global ambitions in the foreign exchange (Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term) space by shedding nearly two-thirds of the trading platforms it gives currency quotes.

According to a report from the Financial Times this Monday, the move confirmed today is part of an effort to cut costs and will mark a big change to its FX business, as Citigroup is one of the largest dealers in the forex market.

Citi’s global head of FX electronic platforms and distribution, Alaa Saeed, told the news outlet that the bank had inspected 53 vendors and had already severed connections with a dozen of them, while another “20-odd” were going to be cut in the future. “We are just giving our clients time to switch,” he said.

According to the report, Brian Mccappin, the bank’s global head of foreign exchange institutional sales, added that Citi would hold annual reviews of the platforms it uses. For new venues, they are most likely going to have to pitch to be considered for trading.

Citi: platforms don’t provide value for money

As Finance Magnates reported, the review that commenced back in October will see the bank cut the number of third-party platforms it gives currency quotes to 15 from 45 by the first quarter of 2020.

In particular, the Wall Street bank expects the scale-back to save $5 million to $10 million in costs a year. This is because the review found that the bulk of the trading platforms did not provide value for money.

Multi-bank, multi-user platforms have revolutionized FX trading over the past decade. According to the Financial Times, at least two other major banks are reviewing their use of external systems.

The increased scrutiny on trading platforms is likely to be directed to smaller systems, which are already under pressure from low trading Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term. Larger platforms such as Reuters-owned FXall and Deutsche Börse’s 360T will likely keep their place as a top pick for banks.