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FOREIGN EXCHANGE

EBS to move to new tariff

Icap has confirmed that it is to introduce a new brokerage (bro) tariff on EBS from January 1. The charges, detailed below, will replace the current $25 per deal charge.

As banks have always worked out their bro bill on a per dollar basis, the move seems to make sense and is unlikely to face much resistance. Icap says that the new system will remove the complicated credit system it has in place currently and that it will reward high-volume users with its clear volume discount scheme. Banks can aggregate their global volumes to qualify for discounts.

The new tariff sticks with EBS’ passive/aggressive structure – this means that price makers pay 50% less than price takers. “I think the new bro structure will simplify the system, make pricing easier to understand and compare to other brokers by taking a cost per million approach. That said I’m sure all the heavy users are running their numbers to see how the change will affect them. There’s bound to be winners and losers, depending on dealing profile, and that will be EBS’ challenge to manage,” said one senior figure at a big EBS user.

The transparency of the new tariff calls into question the charges of other platforms and how long they can keep them as high as they sometimes are. For instance, fees appear to be around 40% lower across the board than those published by FXMarketSpace.

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