Exclusive Online Only ContentIcap Signs Market Data Pact With FX Solutions
June 25, 2008
Interdealer brokerage Icap has agreed to supply currency data from its EBS spot foreign exchange platform to online forex broker FX Solutions, which was purchased earlier this year by City Index, a London-based provider of retail trading services.
Saddle River, N.J.-based FX Solutions says it will use Icap’s EBS data to support its pricing engines. “This will give retail clients confidence in the integrity of FX Solutions’ prices, which is a major factor when dealing in off-exchange products,” said Tom Plaut, co-founder and managing partner of FX Solutions. “The EBS platform is where prices originate in the major currency pairs,” said Plaut, adding that Icap has made FX Solutions “its exclusive retail FX market data partner.”
Neither FX Solutions nor its retail customers will have direct access to EBS or the prices of trades executed on the platform. The goal of the deal, according to City Index spokesperson Alison Cashmore, is to “give clients an added level of confidence in the integrity of FX Solutions’ prices. Retail users of FX Solutions will have the reassurance of knowing that FX Solutions’ pricing engine takes a feed from EBS, the market leader in FX pricing.”
City Index, whose parent, Intercapital Private Group, has a 20 percent stake in London-based Icap, offers contracts for difference (CFDs) and FX trading, both on margin. Users need only deposit a fraction of the full value of a trade to open a position. “Our CFD service offers trading on indexes, currencies, commodities and individual equities,” Cashmore said. While CFDs typically are traded on 10 percent to 20 percent margin, FX is more highly leveraged--up to 100 times the amount deposited, she said.
FX Solutions also expects to leverage Icap’s global sales force to promote the forex broker’s white-label platform to wholesale market participants, offering them electronic and Web-based systems to access the retail foreign exchange community.
“We hope this will attract banks that are now recognizing the opportunity offered by retail FX,” stated City Index chief executive Clive Cooke.
Calling EBS “the leading source of price data in the spot FX markets,” David Rutter, deputy CEO of Icap Electronic Broking, said that the partnership with City Index “will greatly support the development of the retail FX market.”
Icap spokesperson Candice Adam stressed that “it is incorrect to say that Icap is going after the retail market” via the deal. “We are leveraging this market purely from a market data perspective. This is a market data agreement where FX Solutions uses data from the EBS platform for their pricing engines.”
Icap will receive an undisclosed sum for supplying the data, Adam added, much the way the broker does “in the context of any other market data agreement. An example would be our agreement with Reuters--they are the exclusive provider of BrokerTec prices.” Icap’s government bond-focused BrokerTec platform signed that agreement in 2005.
City Index announced on Feb. 6 that it had purchased FX Solutions, founded in 2001, in an all-equity deal for an undisclosed amount.
One week earlier, FX Solutions launched GTS Web, which gives customers around-the-clock access to its Global Trading System (GTS) without downloading or installing software. The platform is the online version of GTS Pro, a next-generation forex trading system FX Solutions introduced in September. In March, GTS Mobile made its debut, providing users of handheld devices with Global Trading System data and services. The mobile function is free to all GTS account holders, according to the FX Solutions Web site.
