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Foreign Exchange

RBC links to Reuters RTFX to boost Asian coverage

Royal Bank of Canada has become the first Canadian bank to act as a market-maker through the RTFX FX trading platform, a marketplace of more than 650 financial institutions, as it seeks to expand its global coverage of foreign exchange, particularly in Asia.

The link-up will complement RBC’s own single-dealer FX platform offering, FX Direct, and other multi-dealer exchanges.

RTFX and equivalent systems such as FX Trading on Bloomberg ease trade with customers in parts of the world where limited internet infrastructure means single-bank trading platforms are less effective in price making and suffer from latency issues.

RBC is targeting regions such as Eastern Europe and particularly Asia as places to pick up new business from bank clients, via RTFX.

“It’s a well-established platform within the bank community, and more specifically with financial institutions that are not global and maybe focus on the middle market of their own domestic FX customers,’’ Stamos Fokianos, RBC’s global head of FX e-trading, tells EuromoneyFXNews.

Systems such as RTFX are popular with regional bank-style customers because they already use the Reuters 3000 dealing system, to which RTFX is attached.

“As relates to the latency of certain areas, RTFX leverages Reuters infrastructure and is well established in certain countries, including Asia. That’s one of the reasons why we decided to expand our capabilities through this platform,” adds Fokianos.

Building up its bank client franchise is a strategy that has already begun to pay dividends for RBC. In this year’s Euromoney FX survey, RBC registered the second-largest market share improvement for bank clients, boosting its share by 121% in that segment as it rose 14 places to 19th position. In Asia, RBC grew its bank client market share by 96%, the third-best improvement in that region, while at the same time rising two places to 18th in the overall survey.

Last week it appointed Doug Moore to the newly created position of head of RBC Markets, Asia, reporting to Mark Standish and Doug McGregor, the co-heads of RBC Capital Markets. Moore comes with more than 23 years’ experience in the financial sector, having built a financial-services business for Credit Suisse in Hong Kong.

“We do want to push Asia, and we expect a lot of things to come from Asia,” says Philippe Savoy, an FX managing director at RBC. The bank’s latest initiative has been to launch its deliverable offshore Chinese yuan platform, while late last year it announced plans for a new trading floor in Hong Kong that would double its capacity.

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