EBS and FXall looking to service Corporate Treasurers – so where does that leave bank SDPs?

The two main FX platform providers, ICAP’s EBS BrokerTec and ThomsonReuters have both announced new multi-dealer offerings to better service corporate treasurers.

EBS BrokertecEBS BrokerTec has announced they are integrating ICAP’s My Treasury, their fully disclosed relationship based multi-product, multi-bank, multi-fund, multi-currency solution for corporate treasurers into the EBS platform. The new offering will be called EBS Treasury, and will be available later this year.

EBS Treasury will offer: FX spot, FWD, Swaps, with FX pricing from EBS Direct. Trading will be provided by Streamed RFQ (request for stream), which is a new addition to EBS Direct’s execution functionality. The streamed RFQ will allow banks to stream tailored prices to corporates. EBS Treasury will improve efficiency for corporates that currently source FX liquidity and money market products from multiple providers. EBS Treasury will be designed to integrate seamlessly into existing treasury management systems.

Justin Meadows, CEO of MyTreasury,  said:

“I am confident this newly integrated offering will prove to be a valuable and exciting platform for corporates wanting access to the FX markets”

Whilst, Severine Le Blevennec, director of EMEA treasury at Honeywell and a MyTreasury client said he was looking forward to the additional capabilities of the platform.

“The addition of FX trading to MyTreasury is a positive step towards the delivery of the multi-product, multi-bank platform that all corporate treasuries are looking for,” he said.

My Treasury currently has some 300 corporate clients using the platform, which will extend the distribution channel for EBSDirect’s FX liquidity and play to their strategy of broadening and diversifying the client segments serviced.

ReutersThomson Reuters (TR) meanwhile has announced that FXall’s Quick Trade (request for stream) pricing will be available for corporate treasury clients through the Eikon Desktop, delivering a complete solution that combines news, data and market analysis (from FX Buzz) with direct access to 140 FXall liquidity providers.

Delivering automated pricing on spot, Fwds, and Swaps, while also benefiting from FXall’s STP and post-trade reporting and analysis. Trades executed in Eikon can automatically flow through to FXall Settlement Center, enabling treasurers to streamline the confirmation process with their liquidity providers.

Neill Penney, head of foreign exchange workflow at Thomson Reuters said that:

“Many corporate treasurers have light FX trading needs but still need access to liquidity on a regular basis. We recognize how much easier it is for these customers to be able to access everything they need from within one application,”

“The integration of FXall QuickTrade functionality into Eikon is a milestone in Thomson Reuters strategy to bring together all of its FX assets onto one platform. By combining the intelligence and analytics of Thomson Reuters Eikon with the market liquidity of FXall QuickTrade, we are simplifying how our customers can engage with the FX market.”

Single-Dealer Platforms (SDPs) In terms of traditional Bank Single-Dealer Platforms (SDPs), they aren’t going away. Just as some clients prefer to access bank liquidity via multi-dealer platforms, some will now prefer to access FX via EBS Treasury or through TR Eikon.

Overall the non-financial segment (Corporate market), accounts for roughly 3% of daily FX flows according to the Bank of England latest FX semi Annual FX survey, as some $89bln/day. The breakdown of the flows by channel are shown in the chart and table below.

Corporate FX flows by channel

Non-Financial Institutions (Corporate client) FX flows by execution channel
(Latest Bank of England Semi Annual FX Surveys)

Whilst you can clearly see the red dotted MDP line has crossed the blue dotted SDP line, both are way below the majority of client flows which are still executed directly with banks.

So, what’s happening here is part of the general move to migrate the bulk of client flows on-line. Clients will still continue to use banks SDPs, especially as banks continue to invest in offering deeper integration with additional bank services such as payments and cash management and other unique bank services for their clients.

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