One of the world’s largest banking institutions, State Street, has gone live with a new sophisticated FX trading platform for the asset management sector. The bank has reported that TruCross/FX is now live and open to institutional investment managers. The new platform provides users with an FX spot benchmark execution product that facilitates the matching of institutional trades at benchmark rates.
The new solution will be rolled out selectively in three countries and will be made available through FX Connect, the bank’s signature asset management platform for currency trading.
Mark Snyder, pictured, Executive Vice President and Head of State Street Global Markets Sales & Trading and Research Business, commented about the new platform in a statement: “The Financial Stability Board has recommended the development of industry-led independent netting and execution facilities for transacting fix orders. In addition, the FSB recommended that fixing transactions be priced in a transparent manner and in a way that is consistent with the risk borne in accepting such transactions, TruCross/FX offers just such a facility.”
TruCross/FX comes to the market with a new angle; it offers users an alternative to the current system of bilateral buy-side to sell-side benchmark order submission process.
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In its notification the bank explained the benchmark rates process: “A series of automated daily sessions match buy and sell orders for certain currency pairs which are then priced with reference to the selected benchmark price. Once the benchmark orders are matched, only the unmatched amounts are executed in the market during the period in which the benchmark is calculated utilizing a proprietary algorithm. TruCross/FX will deliver the WM/Reuters mid-rate benchmark rate net of fully disclosed commissions and rate adjustments.”
The bank plans to deploy the portal through other trading platforms in the future, furthermore, a key functionality of the new system is that institutional investors can submit orders to a session ahead of a fixing with no pre-trade information leakage to the market, their trading counterparties or State Street’s principal foreign exchange trading desk.
Transparency of FX rates has been a key taking point at financial institutions across the globe after the unfortunate rates fixing cases. As a result, technology vendors and banks have been doing their utmost to please regulators and government officials as they attempt to clear up the mess.
“TruCross/FX offers our clients a transparent, clearly communicated and documented fee structure, and efficient trading solution for their benchmark FX transactions,” added Mr. Snyder.