UBS agrees to act as intermediary on Cboe FX

UBS will act as intermediary for smaller firms with limited bilateral credit and relationships on Cboe FX.

Swiss investment bank UBS has agreed to act a central credit intermediary for counterparties on Cboe FX.

The move means small and mid-sized banks and financial institutions with limited bilateral credit and relationships can use UBS as a spot FX intermediary, allowing them access to the pool of liquidity.

Counterparties that are eligible will be able to settle trades exclusively with UBS and gain exposure to Cboe FX participants without direct credit relationships.

“We know that establishing bilateral credit relationships can be a challenging process for many smaller and regional financial institutions and we wanted to find a way to help reduce this friction in the market,” said Bryan Harkins, co-head of markets at Cboe Global Markets.

“We’re pleased to work with UBS to create a new solution that enables eligible counterparties on Cboe FX to access the bilateral credit lines established by UBS, up to the limit that UBS sets for them, helping to create deeper, more liquid markets.”

According to the latest statistics published by the exchange operator, Cboe’s global FX total notional value has grown 28% year-to-date in November, although monthly total notional value fell slightly in October.

In November, Cboe saw record activity on its block trading platform, Cboe LIS, with average daily notional traded of €348 million, up 27.7% from its previous record set in July this year.

The exchange added that total notional value traded on the platform reached a record €8 billion for large in scale (LIS) activity in the month of October, and Cboe LIS accounted for 22% of the block trading activity that took place on non-displayed venues throughout last month, according to data from big xyt.

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