Over 180 banks worldwide are using Thomson Reuters eFX trading platform to provide control over electronic pricing, distribution and hedging to meet the needs of the various markets and the regulators requirements. Many corporates are in a similar position of having to set rates and frameworks for their group companies as well as trade with banks. Some are starting to run their day-to-day trading activities and manage their internal/external exposures (market, price and counterparty) in a fully transparent, economical and automated way using the Thomson Reuters electronic trading platform.
eFX trading platform
The Thomson Reuters Electronic Trading platform combines Price Discovery and Price Creation And Distribution, as the diagram below shows:
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Many banks need the full range of functionality to be able to offer a competitive range of FX services operating in all type markets/liquidity pools: relationship trading, ECNs, exchanges and even hybrid models, e.g. ICBC in China have just installed the Thomson Reuters FX e-commerce solution Electronic Trading to strengthen its presence in the foreign exchange market.
Few corporates need to provide this range of services and functionality or trade in so many different types of liquidity pools. However, there is considerable overlap with what banks and corporates require, so not surprisingly Thomson Reuters already have some large corporates using their Electronic Trading Platform and who are finding that the main benefits include:
- pricing engine for in-house, e.g. offering dynamic internal rates rather than using a fixed rate for the year
- the fully automated workflow tool enables them to electronically manage day-to-day exposures
- advanced intra-group trading with direct hedging possibilities
- automated order management to track incoming orders and execution into the market
- transparent pricing mechanism which can be used to prove to the regulators that the rate is fair and reasonable
- audit trail in which transactions are fully logged and reported (particularly important for reporting in-house rates to the regulators)
- access to different liquidity pools to offset exposures in the market (make or take liquidity)
- risk management across all electronic trading - internal, counterparty or market risk.
CTMfile take: Many large corporates are the same size as their banks and have similar electronic trading processes and exposures. The eFX trading platform from Thomson Reuters clearly offers major benefits for some larger corporates, particularly those that have the regulators demanding more and more detail about internal trading rates.
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