The Chinese government’s China Foreign Exchange Trade System (CFETS) has choosen ICAP’s EBS BrokerTec for the next generation of FX and fixed income trading platform. ICAP’s unit is therefore becoming an integral part of China’s official inter-bank market.
The deal is valued at $65 million and is spread over a three-year period, with EBS BrokerTec establishing a local office and development centre in Shanghai.
ICAP’s EBS BrokerTec will deliver the underlying technology for fixed income and foreign exchange (FX) electronic execution services in mainland China. The business will become part of NEX Group plc later this year, following the completion of the transaction with Tullett Prebon which is acquiring the global hybrid broking and associated information businesses of ICAP.
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The Chinese government has been planning its “Next Generation Trading System” (NGTS) for several years now. After the relationship between London and Beijing has continued to become more friendly in recent years, ICAP’s deal with the CFETS is a big breakthrough for a UK company into the Chinese trading market, which is opening a raft of opportunities.
EBS BrokerTec will leverage the underlying technology behind EBS Market, EBS Direct and BrokerTec Direct, to develop the the NGTS. The end product will significantly improve the capabilities of the CFETS to offer central limit order book (CLOB) and disclosed trading models for FX spot, forwards and swaps.
In addition, via a localized EBS BrokerTec Graphic User Interface, the platform will be applicable to disclosed trading for cash bonds and onshore renminbi.