An industry initiative launched to standardise administrative messages on electronic trading platforms is extending its coverage to FX asset classes.
The initiative, known as the Trading Enablement Standardisation Initiative (TESI), began in January with the backing of a group of leading banks.
TESI aims to avoid errors caused by manual inputs and to simplify the use of electronic trading platforms, including swap execution facilities (SEFs), for buy- and sell-side firms by having an open industry standard protocol, FIX, for client and trader enablement.
Using FIX, sell-side firms are able to integrate their computer-based systems directly with electronic venues. The initiative’s focus was initially on swaps and cash bonds, but has decided to expand to FX, following calls from member banks.
“People have been trading FX using platforms for many years and one of the areas that had been under invested in is the administration area,” Alex Wolcough, head of collaboration practice at Etrading Software, which facilitates the initiative, said.
“By choosing to use the protocol the whole end to end process is faster, with enablement happening within minutes, but one thing that is really important is that it’s done more accurately as well.
Having a highly manual process can also be costly, time-consuming and operationally challenging for brokers, Wolcough said.
The TESI group of banks include BNP Paribas, Credit Suisse, J.P. Morgan, RBS, Societe General and UBS. The group is working together with a number of FX trading venues, including 360T, Currenex, FX Connect and KCG Hotspot. The new venture will cover the electronic trading of FX Spot, Forwards, FX Swaps, FX Options and non-deliverable forwards.