Internet foreign exchange portal FXall has begun trading with price quotes provided by its 14 stakeholder banks, which include global names such as Goldman Sachs, Bank of America and HSBC.
The launch comes after FXall received the authorization it had been waiting for from the Securities and Futures Authority in London, which under European Union (EU) regulations allows it to operate throughout the EU.
FXall had originally planned to launch in the first quarter of this year, and although delayed slightly it has still managed to launch before rival service Atriax, which also counts major global forex banks among its stakeholders and members.
The portal is first bank-owned e-forex platform to take on the first wave of independent portals such as Currenex and the now defunct CFO-Web, which died due to lack of liquidity support.
FXall suffered a minor setback in March when JPMorgan, in wake of the Chase - JP Morgan merger, decided to switch all of its e-forex strategy to the Atriax platform, which is on track for a June launch.
A further 17 banks have also signed on as members to provide liquidity to the FXall system, bringing the total to 48. According to Phil Weisberg, CEO of FXall, the non-stakeholder members will soon begin providing prices and dealing through the system.
"FXall provides us with the full complement of tools to service our clients' needs - from the easiest to the most complex - and it is built on technology we can rely on,” says Peter Gerhard, global head of foreign exchange at Goldman Sachs.
Goldman is one of the banks, like JPMorgan, that has committed to one or the other e-forex platforms. But many banks have signed on as members of both and it will be interesting to see which platform manages to attract the most liquidity.
“For banks that are with both, it will be the preferences of key customers that determine which platform gets the most support,” says one forex trader.
In a interesting move, indicative that the market for e-forex services goes beyond corporate treasurers, money managers and hedge funds, the World Bank has agreed to sit on the customer advisory board of FXall. "FXall will enable us to reap the many benefits that online trading will bring, including better pricing, improved quality of information and true straight through processing," says Mehmet Ozkaya, senior financial officer at the World Bank.
