Chinese choose ICAP for $65m trading platform revamp
China Foreign Exchange Trade System (CFETS), the nation’s official inter-bank market trading platform and infrastructure provider, has chosen ICAP in a $65 million deal.
The technology for fixed income and foreign exchange (FX) electronic execution services in mainland China will be delivered by EBS BrokerTec, ICAP’s electronic FX and fixed income business.
The deal, valued at $65 million over a three-year period, will see ICAP expand into China, and EBS BrokerTec will establish a local office and development centre in Shanghai.
Michael Spencer, group CEO of ICAP, says with the platform, the firm and CFETS, can “play a key role in the future of the renminbi (RMB)”.
Xu Zaiyue, executive vice-president of CFETS, adds: “With acquired intellectual property and source code, CFETS’ technology platform will be greatly enhanced and strengthened.”
CFETS has been planning its Next Generation Trading System (NGTS) for a number of years and ICAP has been chosen to co-operate with CFETS on the core trading components.
NGTS will use EBS Market, EBS Direct and BrokerTec Direct to enable CFETS to offer central limit order book (CLOB) and disclosed trading models for FX spot, forwards and swaps and a disclosed trading model for cash bonds, to the onshore RMB market, through a localised EBS BrokerTec graphical user interface (GUI).
CFETS and ICAP have worked together for more than nine years since the founding of Shanghai CFETS ICAP – a joint venture to provide broking and information services in the onshore and offshore interbank foreign exchange, money market, bond and derivatives market.
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Recently, UK-based ICAP revealed profit and revenue loss for the year ended 31 March 2016, in comparison to the year ended 31 March 2015.
In addition, following the completion of ICAP’s proposed transaction to sell its global hybrid voice broking and information business to inter-dealer money broker Tullett Prebon, ICAP will be re-named NEX Group. As part of the transaction agreement, the ICAP brand will be transferred to Tullett Prebon.