EBS Aims to Abolish Need for Last-Look with New Price Feed Upgrade

Last-look practices may be incidentally less prevalent as pricing processes improve, potentially aiding FX market structure, EBS says.

UK-based interdealer broker ICAP today announced through its EBS BrokerTec business that EBS Live will stream real-time market data to its newly created “EBS Live Ultra” feed. This news was announced in a company press release that described the effort as aimed towards improving transparency and price discovery, which may incidentally lessen the need for last-look.

The company said that the change was also in response to demand and feedback from clients, as the company processes many billions of dollars’ worth of foreign exchange across key FX major pairs for the Interbank market, and thus could potentially affect its end users who could pass such pricing efficiencies to end-user trading clients.

The new upgrade to EBS Live Ultra feed will be available around Q3 2016 and will be delivered by a new binary protocol over multicast to help assure fast and simultaneous delivery.

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there’s less likely to be the need, or justification to review client execution on last look venues.

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Commenting in the  EBS press release, Gil Mandelzis, CEO of EBS BrokerTec, said: “With pricing more clearly and reliably available, in real time, there’s less likely to be the need, or justification to review client execution on last look venues. This will have a positive effect on the market’s ability to rely on firm venues for execution purposes.”

Last-look remains a debated issue as banks or dealers can often decide in the smallest time frames whether or not to reject/reprice or otherwise act upon an order when comparing the order’s price against the changing backdrop price of the market (i.e. a last chance to look and compare the order to what is happening before executing).

With the race to zero latency continuing and as FX market pricing becomes more centralized, the need for last-look could be abolished as pricing improves at venues such as those provided by EBS.

Also commenting in the press release, Alex Gerko, co-CEO of XTX markets, said regarding the EBS upgrade: “Streaming market data is definitely a benefit to the market ecology, especially for the primary venues. It creates and promotes greater price transparency which negates the predatory behaviour of some market participants as it allows the broader market to have access to, and quickly reference, real-time pricing data.”

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