Six banks, including JPMorgan Chase & Co. (JPM:US) and Bank of America Corp., have formed a group designed to facilitate foreign-exchange market trading for institutional clients.
FXSpotStream LLC, a subsidiary of LiquidityMatch LLC, was started in the U.S. April 30, Chief Executive Officer Alan F. Schwarz confirmed in a telephone interview. The company will provide a currency-price aggregation service to the clients of Bank of America, Citigroup Inc., Commerzbank AG, Goldman Sachs Group Inc., HSBC Holdings Plc and JPMorgan. The banks are majority shareholders in FXSpotStream.
“Clients access a single interface from co-location sites in New York, London and Tokyo and have the potential to communicate with all liquidity-providing banks connected to the FXSpotStream solution,” Schwarz said in a release.
The service will begin June 1 in Europe and Aug. 31 in Asia, he said. It will not charge brokerage fees to clients.
“SpotStream is another market utility and it’s a means for us to efficiently connect with our clients and continue to maintain bilateral relationships,” Richard Anthony, global head of foreign-exchange electronic risk at HSBC in London, said in a telephone interview.
Fergal Walsh, co-head of foreign-exchange electronic trading at Citigroup in New York, said the service would eliminate brokerage fees often paid by banks when a third party is involved in transactions with clients.
“We are in an extremely competitive market now, our spreads are incredibly tight, and broker costs can make up a significant part of our margins,” Walsh said in a telephone interview. “In an effort to control those, and also give a more efficient service to our clients, we are happy to participate in this solution.”
Bloomberg LP, the parent company of Bloomberg News, offers electronic currency trading.
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