State Street Corporation (NYSE: STT), a global financial services holding company, is gearing up for the eventual implementation of MiFID II in January 2018. The group has garnered approval from the United Kingdom’s Financial Conduct Authority (FCA) to upgrade its foreign exchange (FX) trading platforms, FX Connect and Currenex, to operate as multi-lateral trading facilities (MTFs) within the jurisdiction of MiFID II.
The approval of both FX Connect and Currenex from the FCA is an important stroke for each platform as they look to make a splash in the largest markets in Europe amidst a newer regulatory playing field. The upgrade will also improve both platforms’ ability to support and leverage the execution needs of a growing clientele. Currenex operates presently as a provider of high-performance technology and deep pools of liquidity to professional FX traders. FX Connect is an FX execution venue for institutional trading firms.
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Eyes on January
Per the approval, the FX Connect and Currenex platforms will effectively operate as MTFs, achieving a status like other groups in the industry such as LMAX Exchange. Both groups will also be contacting its existing customers to further outline the ramifications and details of the process as well as the eligibility requirements for onboarding to the MTFs.
It is important to note that under the new regulations, for any and all institutions that fall under the MiFID II regime, financial instruments can only be traded on the new MTFs. However, the operators of Currenex and FX Connect are located outside of MIFID II’s jurisdiction, i.e. Currenex Inc and FX Connect LLC respectively, and will not be implementing similar restrictions. Thus these groups will continue to offer the same trading facilities that they currently do.
David Newns, Global Head of Currenex and SwapEx, as well the group’s acting EMEA Head of GlobalLink at State Street Global Markets, commented: “We are delighted to have received these approvals from the FCA. The Currenex MTF and FX Connect MTF are both based on the award-winning technology of their parent platforms, and as the European FX market becomes more regulated under MIFID II it means we can continue to support the execution and trading operations of our clients.”