It has become increasingly difficult to distinguish one good cash trading system from another. Most sites for trading spot, forwards and swaps in forex have indicative streaming prices, request-for-quote trading screens and online blotters that log trade details and that can, where requested, feed directly into a client’s treasury management system.
The winner here, Citigroup, offers the widest range of quality cash execution tools for the widest range of clients.
Some banks’ systems cannot take and work orders for clients over time. Citigroup’s can, and it has gone one step further in the development of CitiFX Benchmark. This is not a new product for the bank. It has been around for five years, has more than 100 clients using it and, according to the bank, executes larger volumes of trades than some of the multibank systems.
This system for leaving orders is more sophisticated than many cash execution platforms. It will accept order uploads in any format, so that clients do not have to reconfigure their spreadsheet according to a specific template. It also nets transactions automatically for settlement purposes post trade. But it is not perfect – unlike many cash execution systems, it does not net trades pre-execution.
For simple cash forex execution, the bank offers a platform in line with most others in the market, called Chief Dealer. It contains the usual non-negotiable request-for-quote and full audit history, but with the rare advantage of deal upload and download in any format, plus pre-trade allocation. The bank says negotiable, streaming quotes are to come in the deal ticket. Clients can also auto-execute trades at set fixing times on Chief Dealer using CitiFX’s benchmark rates.
Citigroup has also added to its diverse mix of trading methods this year in its joint venture with Instinet. The platform works by netting and matching client orders at benchmark rates, either all in one go or over a series of matching times until the full order is filled. As it is not yet live, it has not directly influenced Citigroup’s success in this award. But it adds to the diversity of ways Citigroup is looking to service different clients’ different needs in a commoditized market.
Most banks maintain that demand is low for dealable, streaming prices, and most are unwilling to go beyond offering indicative streaming rates. But as clients become more sophisticated, bankers admit they are looking for quicker functionality. This makes it imperative to have a robust price engine, which can at least quote large amounts quickly when requested. Banks that can not quote such big tickets automatically are already beginning to lose trades in competitive systems. Deutsche Bank and Barclays Capital are runners-up this year because they have already introduced this new trading technology.
