CME Group’s EBS to disable by default all Liquidity Providers not aligned with FX Global Code

Rick Steves

EBS Direct will also update its dealing policy to reduce its “last look” thresholds from 200 to 30 milliseconds. 

EBS, CME Group’s FX trading technology provider, has announced an update to its liquidity provider eligibility criteria for EBS Direct, its relationship-based quote-driven market, to help accelerate the industry shift towards full compliance with the FX Global Code.

In a milestone move for the FX industry, from April 1, EBS will disable liquidity providers from all EBS Direct liquidity pools by default unless they have signed up to the FX Code.

EBS Direct clients will still be able to deal with non-compliant LPs

EBS Direct clients will be able to maintain relationships with non-compliant liquidity providers if they choose to, but they must proactively opt to do so.

Jeff Ward, Global Head of EBS, said: “As a market-leading platform for FX spot and forwards liquidity, the changes we’re announcing today for EBS Direct will accelerate the industry shift towards FX Global Code compliance. Our new trading rules will create minimum standards for our market while our new transparency tools will help the ecosystem evolve.”

The decision has received praise from the Global Foreign Exchange Committee (GFXC) as well as Credit Suisse and XTX Markets.

Andréa M. Maechler, Chair at Global Foreign Exchange Committee (GFXC), commented: “Any measures that help to increase transparency in the foreign exchange market and support FX Global Code adherence by market participants are welcomed by the Global Foreign Exchange Committee.”

John Estrada, Global Head of FX Trading at Credit Suisse, said: “Credit Suisse supports adherence to the FX Global Code and we appreciate the work done by EBS Direct to encourage compliance. FX must continue to move forward and this work is a step in the right direction.”

Zar Amrolia, Chairman & Co-CEO at XTX Markets, added: “We congratulate the efforts and progress made by both EBS and its LPs in tightening the thresholds for last look times. Today’s changes from EBS are an important step forward in the industry’s journey to zero additional hold times in line with the FX Global Code.”

EBS Direct reduces “last look” thresholds to 30 milliseconds

EBS Direct will also update its dealing policy to reduce its “last look” thresholds from 200 to 30 milliseconds.

A recent review of trading on EBS Direct revealed that average last look hold times in 2022 were just 12 milliseconds and 96% of volumes were with liquidity providers that have stated their adherence to the FX Global Code.

EBS Direct is also enhancing its transaction cost analysis (TCA) tools, including metrics to monitor flow quality, such as whether a counterparty is co-located with the exchange, and median, 90% and 99% last look hold times.

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