ICAP is planning to display currency prices from both identified and anonymous sources on the same screen.
The large interdealer broker is launching a second electronic broking system for currency trading, alongside its flagship EBS platform that matches orders from anonymous parties involved in spot trading.
The new service, to be called EBS Direct, will provide what ICAP calls “relationship-based disclosed liquidity.” This, it believes, will increase trading by allowing providers of liquidity to tailor prices that they send directly to consumers of liquidity.
The service will compete with similar “direct” markets such as Knight Capital’s Hotspot FX system and the 360T Trading Network.
Prices will be displayed in one percent of a point and ten percent of a point increments. Prices will be available on the EBS Workstation, a browser-based service called EBS Global Access and through an application programming interface known as EBS Spot Ai.
“This is the first step in a number of long-term strategic initiatives to provide a complete suite of products and services that benefit both liquidity providers and liquidity consumers,” said Jeff Ward, which ICAP appointed as its global head of the EDS Direct service.
Liquidity providers involved in the project include ANZ, Bank of Tokyo-Mitsubishi UFJ, Barclays Capital, BNP Paribas, Bank of America Merrill Lynch, Citibank, Commerzbank, Credit Suisse, Goldman Sachs, HSBC, Jefferies & Co., J.P. Morgan, Morgan Stanley, Nomura, Nordea, Royal Bank of Scotland, Société Générale, Standard Chartered and UBS.
ICAP said more than 100 customers have signed up for the service which starts in December.
The matching of lit and dark prices on the same screen comes as the amount of trading in currencies is dropping radically.
Earlier this month, ICAP said volume on its EBS currency trading platform had dropped 46% from a year ago. Activity hit its lowest level since 2006.
The direct service will open up “the trading environment and providing an orderly and fair market for all participants,’’ said Mark Johnson, global head of FX Cash Trading at HSBC.
EBS was created in 1990 by many of the major market-making banks in foreign exchange trading to compete with Reuters’ then-monopoly in interbank spot trading. EBS was acquired by ICAP, in June 2006.
Bats Chi-X Europe is considering entering the listed market for foreign exchange, as well, according to Financial News.