Compagnie Financière Tradition’s spot currency trading platform, ParFX, agreed today to let hedge funds join the action in an effort to increase liquidity and create a wider trading community, according to a report by Reuters.
The previously bank-only platform features technology said to be able to to curb the advantage of high-frequency trading, is aimed at achieving a level playing field between high and low latency traders. It was launched in April 2013, and lists 12 global banks as its founding members including: Société Générale, Barclays, Deutsche Bank, BNP Paribas, RBC, UBS, Morgan Stanley, SEB, Standard Chartered and State Street.
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Roger Rutherford, chief operating officer at ParFX, is quoted by Reuters as saying: “In the coming months, we will allow customers to trade through their prime broker alongside the banks.” The main clients for prime brokerages, usually owned by banks themselves, are hedge funds, but the platform will implement controls on the prime broker side meant to prevent high-frequency trading techniques that some hedge funds rely on.
“We understand that certain types of trading behaviour exist because they have a mask of anonymity. This will not be the case at ParFX – buy-side firms that trade on our platform will be subject to the same rules, compliance and full transparency as existing players,” Mr. Rutherford further commented.