Global asset manager Russell Investments and Integral Development Corp., a leading FX technology company, announced today the launch of Russell FX Network (RFX Network), a new end-to-end trading solution for the buy-side community for netting, execution and allocation of foreign exchange transactions. RFX Network is designed to help institutional investors including asset managers obtain currency exchange rates that seek to minimize tracking error with respect to the rates published by WM/Reuters.

Combining internal netting within an investor’s trading portfolio with external matching

RFX Network allows buy-side firms to automate execution of complex trade lists in a novel solution that combines internal netting within an investor’s trading portfolio with external matching amongst the larger buy-side community. RFX Network combines two technology solutions developed by Integral — powerful internal netting capabilities and an FX facility that matches customer interests at the midrate — into a comprehensive FX execution service.

Participants can benefit from advanced netting, process automation and best execution while minimizing market impact of their orders. Investors can place orders electronically into RFX Network or have Russell process them on their behalf. Fixing orders are matched with other investors, while any unmatched residual is executed by a trading algorithm that mimics the Fixing process to minimize tracking error.

Joe Hoffman, director, equity derivatives and foreign exchange at Russell Investments, said, “RFX Network provides institutional investors with a revolutionary way to transact their benchmark orders and improve execution at fixing times. This new offering follows a long tradition of innovation from our global implementation team, providing clients and the broader institutional investor community with a comprehensive solution.”

Hoffman added that Russell is in a unique position to help plan sponsors and asset managers manage their fiduciary responsibilities involving executions that historically have been costly to trade and difficult to evaluate.

“Everyone is aware of the challenges our industry has faced the past year with regard to Fixing,” said Harpal Sandhu, CEO, Integral Development Corp. “Combining Russell Investment’s deep understanding of FX markets with Integral’s award-winning technology results in a fair, transparent, and efficient way for the buy-side to execute complex trade lists and reduce Fixing-related risk. Russell is one of the most highly regarded fiduciary managers in the world. We are excited to work with them to bring excellent service to the asset management community.”

FX execution service launch in 2nd quarter

Institutional investors can use RFX Network now for trading at non-fixing times as well as at the Fix beginning in the second quarter of 2015.  

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CTMfile take: This is a good example of how new FX services are being integrated with the investment portfolios and trying to overcome the dependent on the FX Fixing rates. The issue here is: How independent is the midrate calculated by Integral? Using true midrates for FX is one of the biggest issues in FX trading today, see NCFX service.