NatWest Markets Removes Additional Hold Time for e-FX

In a major move towards transparency, NatWest Markets announced that it has decided to scrap the latency buffers, also known as the hold period, for e-FX. In a recently updated disclosure, the bank mentioned that further information regarding the latency buffers applied historically will be provided upon client request.

Additionally, NatWest Markets has updated its disclosure and outlined details related to the FX transactions. The recent news came a few weeks after leading banks, including Morgan Stanley, UBS and Goldman Sachs scrapped the additional hold times.

“A latency buffer (also known as a ‘hold period’) is an enforced time period following receipt of a transaction request after which a dealer checks its current FX rate against the FX rate requested by its client when performing rate validation. As of the date of this disclosure, NatWest Markets no longer applies latency buffers to its FX trading. Further information relating to latency buffers applied historically may be provided upon client request,” NatWest Markets mentioned in an updated disclosure.

NatWest recently faced some challenges in the US after the financial services provider was slapped with a $35 million penalty by a US court.

FX Transactions

Global volume related to FX transactions has been on the rise since the start of the pandemic. Liquidity providers have touched record volumes and witnessed a jump in demand for FX-related services. With that, the need for greater transparency has also increased. According to NatWest Markets, the recent initiative will make transactions more transparent and efficient.

“NatWest Markets may, in its discretion, improve the FX rate requested by the client should the FX rate at which NatWest Markets is prepared to trade improve for the client in the period between the submission of a transaction request by the client and the acceptance of such request by NatWest Markets. This is known as price improvement and results in an improved FX rate for the client in comparison to the FX rate originally requested,” the company said.