There’s been some consolidation in the world of FX electronic trading platforms on Monday.
According to a statement released by foreign-exchange platform FXall, Citigroup has reached an agreement with the company to sell it its LavaFX foreign-exchange electronic trading platform for an undisclosed sum.
The statement reads:
4 January 2010 – FXall, the world’s leading institutional multi-bank electronic foreign exchange platform, today announced an agreement to purchase LavaFX from Citi. The acquisition is the latest addition to FXall’s offering as it continues its long established program of investment to create the best platform for clients. With LavaFX, FXall grows its institutional client base to nearly 1,000 of the world’s largest hedge funds, CTAs, banks, broker-dealers, corporate treasurers and asset managers and adds capabilities to give clients an edge at every phase of the transaction lifecycle.
Citigroup had invested in developing cutting-edge algorithmic order processing optionality for LavaFX, including the ability to timeslice orders and dictate market conditions for order placement.
It had also hoped the product would successfully break into the interbank market — to date dominated by Reuters and EBS.
According to a 2004 Lava press release, the group launched its FX arm in October of that year, hoping to revolutionise electronic global currency trading.
So what prompted Monday’s deal?
From Citi’s perspective, it already has a successful equity and derivative-focused ECN in the form of Lava Trading. Accordingly, selling off LavaFX won’t see Citi lose out on the overall algorithmic flow game.
What’s more, as Citi’s Jeff Feig, global head of G10 foreign exchange notes in the press release (our emphasis):
Jeff Feig, Global Head of G10 Foreign Exchange at Citi, added: “LavaFX is an innovative force in the industry, having built an excellent platform with talented staff. Citi believes a multi-bank platform is best owned by a multi-bank provider, making the sale of LavaFX to FXall the right strategy for its continued growth. As a shareholder and long standing liquidity provider to FXall, Citi is confident LavaFX clients and employees will benefit from this transaction. Citi will continue to support LavaFX and contribute to its future success as a part of FXall.”
In other words, it looks like the move is designed to support FXall’s general bid to dismantle Reuters and EBS from their interbank dominance.
Rather than competing with FXall on flow, Citi is perhaps opting to support the multi-bank-owned endeavour with the sort of liquidity (not just surplus flow that it itself cannot offset) that could very well make a difference in who eventually wins out.
FXall today is owned by 16 banks including Citi, having been formed back in 2000 by seven founding participants.
Interestingly, Citi was previously part of the consortium of 13 banks that sold EBS to Icap in 2006.
Related links:
FXall to buy forex platform from Citi – FT
FX is changing - FT Alphaville
沒有留言:
張貼留言