Chinese government’s CFETS chooses ICAP’s EBS BrokerTec for next generation FX and Fixed Income trading platform
03 June 2016
Hong Kong, London, New York, 3 June 2016 – ICAP plc (IAP.L), a leading markets operator and provider of post trade risk mitigation and information services, announces today that China Foreign Exchange Trade System (CFETS), China’s official inter-bank market trading platform and infrastructure provider, has chosen ICAP to deliver the underlying technology for fixed income and foreign exchange (FX) electronic execution services in mainland China. The technology will be delivered by EBS BrokerTec, ICAP's market-leading electronic FX and fixed income business, which will form part of NEX Group plc, following the completion of the transaction with Tullett Prebon to dispose of ICAP’s global hybrid broking and associated information businesses.
An important infrastructure service provider, CFETS has been planning its “Next Generation Trading System” (NGTS) for a number of years. ICAP was chosen to cooperate with CFETS on the core trading components of NGTS. Leveraging the underlying technology behind EBS Market, EBS Direct and BrokerTec Direct, the NGTS will enhance CFETS’ capability to offer central limit order book (CLOB) and disclosed trading models for FX spot, forwards and swaps and a disclosed trading model for cash bonds, to the onshore renminbi market, through a localised EBS BrokerTec Graphical User Interface (GUI).
The deal, valued at $65 million over a three-year period, will see ICAP expand into China, a key growth market for the business, with EBS BrokerTec establishing a local office and development centre in Shanghai.
After a thorough RFP process, CFETS selected EBS BrokerTec for its established and robust infrastructure capabilities, unique seamless and integrated trading technology, proven innovation and development of products such as EBS Direct and BrokerTec Direct, and a strong pipeline of product development, which is scalable and aligned to CFETS’ growth strategy.
CFETS and ICAP have collaborated successfully for more than nine years since the founding of Shanghai CFETS ICAP – a joint venture to provide broking and information services in the onshore and offshore interbank foreign exchange, money market, bond and derivatives market. This partnership is the next chapter in a long-established and successful relationship and allows EBS BrokerTec to accelerate its product development.
“ICAP has invested meaningfully in financial technology over many years, which will continue to be part of the NEX Group plc strategy. Our EBS BrokerTec business has a strong track record of innovation in the development of electronic OTC markets”, said Michael Spencer, Group CEO of ICAP. “China is an extremely important financial market and we are honoured that our long term partner, CFETS, has asked us to collaborate with them to build a significant platform which will play a key role in the future of the renminbi (RMB).”
“This is a hugely exciting project for EBS BrokerTec and we are looking forward to working with CFETS to shape market development in the Chinese FX and fixed income trading markets,” said Gil Mandelzis, CEO of EBS BrokerTec. “CFETS’ decision to use EBS BrokerTec technology to launch NGTS is a resounding endorsement for the quality of our technology and our role as a trusted provider of trading infrastructure and venues globally, across multiple asset classes.”
“CFETS consistently drives its independent technology development with various technology resources over the world. The introduction of technology from EBS BrokerTec is an important part of CFETS NGTS project. The platform architecture conforms to the latest standards and has been approved by external technology experts. With acquired intellectual property and source code, CFETS’ technology platform will be greatly enhanced and strengthened,” said Xu Zaiyue, Executive Vice President of CFETS. “I am glad that as our partner, EBS BrokerTec is helping us to achieve our goal. I firmly believe NGTS will become one of the most important infrastructures of China’s RMB market and provide strong and steady support to the development of China’s inter-bank market and globalisation of the RMB. ”
About EBS BrokerTec
An award-winning division of the ICAP Group at the heart of the foreign exchange and fixed income global markets, EBS BrokerTec is a market-leading e-trading technology and solutions provider, offering access to multiple execution options and diverse, valuable liquidity. Constantly creating new, ground-breaking solutions, while continuously investing in proven, market-leading platforms and products, the business provides exceptional value to a globally diverse community of professional traders. For more information, go to www.ebsbrokertec.com.
ICAP is a leading markets operator and provider of post trade risk mitigation and information services. The Group matches buyers and sellers in the wholesale markets in interest rates, credit, commodities, FX, emerging markets and equity derivatives through voice and electronic networks. Through its post trade risk mitigation and information services ICAP helps customers manage and mitigate risks in their portfolios. For more information, go to www.icap.com.
Established in 1994, China Foreign Exchange Trade System (CFETS), is also known as the National Interbank Funding Center. CFETS provides flexible technology, multiple trading models serving multi-tiered markets, trading infrastructure and innovative products to the Chinese interbank market. The company’s aim is to establish itself as 'a global major trading platform and pricing center for RMB and related products'.
Using advanced information technology, flexible communications over leased lines and the internet, CFETS provides customers with a full range of issuance, trading execution, information and post-trade services for RMB-denominated interest rates, exchange rates and related products in cash and derivatives markets.
Every day CFETS publishes market benchmarks including RMB Central Parity Rate, Shanghai Interbank Offered Rate (Shibor), Loan Prime Rate (LPR), CFETS RMB Indices, Fixing Repo Rate, Bond Indices, as well as various yield curves. Its customers cover more than 10,000 market participants and 33,000 information and surveillance service users. In 2015, CFETS’ total trading volume reached 705 trillion Yuan.