SingleDealerPlatforms.Org

Thomson Reuters has today announced an overhaul of the rule book which sets out acceptable behavior and practice within their FX Matching platform.

The changes, first mooted in December follow a long period of consultation and are designed to make the platform fairer and remove the ‘technology advantages’ that some electronic market makers and high frequency trading firms (HFT) have benefited from, and will help to level the playing field. The changes follow similar moves last year by rival EBS.

Amongst the changes are which will affect different currency pairs are:

Randomizing matching algorithm (which will prevent firms controlling ‘top of order book’)

Minimum  Quote Life (‘time in force’) (designed to reduce ‘order flashing’ and allow traders time to hit prices)

Minimum Tick Size (to reduce the amount of price updates and needless ‘gaming’ of the system)

Increase the quote to trade ratio (designed to promote intention to trade when quoting)

The moves, come as both Reuters Matching and EBS struggle to regain volumes to their platforms. With Reuters matching volumes in Feb 14 down 17.5% on Feb 13, whilst EBS Feb 14 volumes were down 44% on Feb 13.

Filed under: FX, Paul Blank, Web trading technology |