These reporting tools track the transaction prices of orders according to their quality and evaluate them in relation to market circumstances.
According to EBS, the decision was made following a thorough analysis of trading on EBS Direct.
‘Last glance’ criteria will be decreased from 200 to 30 milliseconds by the company.
Starting on April 1st, EBS, the CME Group-owned supplier of electronic trading platforms and technology services in the foreign exchange markets, will by default prohibit access to its EBS Direct liquidity pools to liquidity providers that have not signed up to the FX Global Code. The action is a component of the company’s amendment to its eligibility requirements for liquidity providers for EBS Direct.
The company’s relationship-based and quote-driven FX trading platform is called EBS Direct. To support the integrity and efficient operation of the wholesale FX market, the Foreign Exchange Working Group of the Bank of International Settlements initially produced a set of recommendations known as the FX Global Code in 2017.
EBS Direct stated in a statement issued on Monday that the goal of the action is to hasten the industry’s transition to full compliance with the Code. Clients will still be able to keep in touch with unavailable liquidity providers if they so wish and when they “proactively elect to do so,” according to the FX services provider.
Additional Rulebook Modifications by EBS
As part of an upgrade to its dealing strategy, EBS also plans to reduce its “last look” requirements from 200 to 30 milliseconds in its rules. A market member has one last chance to accept or reject a trade request made on its offered price in electronic trading, according to the Global Foreign Exchange Committee (GFXC). A new guideline document on “last look” was released by GFXC in 2021, giving market players further information about how to use “last look” properly.
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Giving more information about the changes to the policies, EBS stated that it made the decision to make the update after a thorough analysis of trading on EBS Direct revealed that, in 2022, the average “last look” hold times were just 12 milliseconds and that 96% of volumes were with liquidity providers who have declared their adherence to the FX Global Code.
In addition to the aforementioned adjustments, the supplier of electronic trading platforms announced that it was trying to improve its transaction cost analysis tools. These are reporting systems that keep tabs on the transaction prices of orders and evaluate them in relation to market circumstances. Either at the time the orders were placed or after the trades were completed, the prices are monitored.
The modifications we’re making today for EBS Direct, a market-leading platform for FX spot and future liquidity, will hasten the industry’s transition towards FX Global Code compliance, according to Jeff Ward, global head of EBS.
Additionally, Ward added that the new transparency tools would aid in the ecosystem’s evolution while the company’s new trading regulations will provide “minimum standards” for its market.