EBS is proposing a trading system that renders speed of placing an order immaterial. Gain Capital Holdings said it signed a definitive agreement to acquire Global Futures & Forex, Ltd. Spurned by Gain, FXCM it is establishing a brokerage that is not regulated. Phil Wood has stepped down from his eFX post at Germany’s biggest bank. TD Bank hires Brian Perry as head of European currency trading.
EBS: Electronic Broking Services, better known as EBS, is proposing a trading system that renders speed of placing an order immaterial.
The operator of one of the two largest foreign exchange trading systems aimed at institutional customers said it is looking at ending “first in, first out” trading, which gives priority to the first orders to arrive.
The unit of interdealer broker ICAP would replace that with a batch processing system. Orders would be grouped in batches, then dealt with in a random order, within each batch.
This could end the “technology arms race” that forces market participants to spend on faster systems, to the exclusion of basic trading principles and strategies, according to chief executive Gil Mandelzis.
“It is a technology arms race to the bottom, and a huge tax on the industry, since people are having to make significant investments in speed without any connection to their trading strategy,” he said. “Speed has little to do with why many participants come to our markets. These are serious players who come to the market to exchange risk; they do not come to race.”
EBS next will talk with its users about whether and how to implement the approach.
Orders could be batched every few milliseconds.
GAIN: Gain Capital Holdings said it signed a definitive agreement to acquire Global Futures & Forex, Ltd.
The $107.8 million deal scotches the unsolicited interest of FXCM Inc. in acquiring Gain, in a deal that FXCM valued at $210.4 million.
“The cash consumed in the acquisition of GFT fundamentally impacts the balance sheet and capital synergies that were an important driver behind our proposal,” said Drew Niv, chief executive of FXCM, which had hoped to increase the size of its institutional FX business by acquiring Gain.
Global Futures & Forex is a global provider of retail forex and derivatives trading with offices in London, Singapore, Tokyo, Sydney and Grand Rapids, Michigan.
GFT offers trading in currencies, currency options, contracts for difference, spreads, and binaries.
Gain already operates a retail brand, FOREX.com, and the two operations will keep their identities, initially.
The transaction is expected to close in the third quarter of 2013, subject to regulatory approvals and customary closing conditions.
“Following our successful acquisition of GFT’s U.S. business in December of 2012, we recognized that combining GAIN’s operations with GFT was a significant opportunity to grow our business across the spectrum of retail and institutional products,” said Glenn Stevens, CEO of Gain Capital.”
FXCM: Spurned by Gain, the provider of foreign exchange trading and related services to retail and institutional customers said it is establishing a brokerage that is not regulated.
FXCM Markets, the unregulated subsidiary, will only be available to customers that are located in places where FXCM does not operate a regulated entity.
FXCM operates regulated subsidiaries in the United States, United Kingdom, Japan, Germany, and Australia.
FXCM Markets will be offering services not available in regulated markets, including 400:1 leverage and interest-bearing accounts.
Trading still will be subjected to ‘Know Your Customer’ (KYC) and Anti Money Laundering (AML) polices of the regulated divisions. FXCM Markets is only available to customers from regions where FXCM doesn’t operate a regulated entity.
DEUTSCHE BANK: Head of electronic foreign exchange trading Phil Wood has stepped down from his post at Germany’s biggest bank.
The move appears to be temporary, with Wood expected to return in 2014.
David Leigh and Roel Oomen will take over Wood’s responsibilities, according to FX Week.
Wood took over for global head of foreign exchange algorithmic trading Dierk Reuter in 2009.
TD BANK: Toronto-Dominion Bank has hired Brian Perry as head of European currency trading for its securities unit.
Perry ran the U.K., European and Middle Eastern Real Money Sales business for Morgan Stanley. He will join TD Securities in London on July 15 as a managing director, according to Bloomberg. He will report to Michael Gibbens, TD Securities’s global head of foreign exchange.
Before joining Morgan Stanley, Perry worked for Royal Bank of Scotland Group Plc (RBS), according to the statement.
Recent departures from RBS include William Fall, the head of its financial institutions group, and Mark Webster, who went to Standard Chartered to be its global head of FX sales.
Also leaving Morgan Stanley: Neill Penney, global head of foreign exchange product strategy in London.
