Thomson Reuters today published operational procedures for trading protocols on its FXall platform, following consultation with the industry.
The procedures announced today include the codified Provisory Liquidity protocol announced earlier this year. The protocol is meant to enable liquidity consumers and providers to make informed trading decisions based on transparent and measurable criteria. A similar protocol was introduced at the same time by Hotspot, the institutional FX market owned and operated by BATS Global Markets.
“The new rules aim to encourage higher standards of behaviour by offering venue rules which are consistently and transparently managed to the highest standard,” said Phil Weisberg, global head of FX, Thomson Reuters. “After a client consultation period, we have finalized a robust set of standards for both our RFQ and Streaming Price trading protocols, where participants trade on a disclosed, relationship basis, as well as our Order Book platform, where participants trade anonymously using either firm or Provisory Liquidity.”
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The final procedures announced today include changes based on market feedback including tighter Offer To Deal response times. A multi-dealer platform, the FXall platform incorporates liquidity from Thomson Reuters’ anonymous ECN, as well as allowing customers to integrate relationship-based pricing.
Thomson Reuters explains that the behavioural and platform controls associated with the Provisory Liquidity protocol empower participants to confidently choose liquidity sources that best suit their needs while mitigating the impact of physical distance on execution quality. They also claim to entitle qualified market makers to manage credit and operational risk when making prices and enable intermediaries to offer liquidity to their customers on a riskless-principal basis, thereby enhancing transparency of execution.