Earlier this year, the triennial Bank for International Settlements (BIS) survey reported that foreign exchange has surpassed daily volumes of $4 trillion. From April 2007 to April 2010 the market grew by 20 per cent.
According to Derek Sammann, managing director for FX and interest rate products at CME Group, volumes traded in CME’s FX products grew by 94 per cent in the same three year period. Additionally, this year, the CME Group saw a 50 per cent increase in its FX business, compared to a growth of 16 per cent on EBS
Sammann attributes this growth directly to counterparty risk mitigation. The BIS figures show CME Group’s FX options business growing 226 per cent whereas the OTC FX options market shrunk by 2 per cent during the same April 2007-2010 time period. “If you just look at the quantitative data, relative to any other benchmark, it tells a story of the continued out performance of CME’s FX listed futures and options business and of a broader and a deeper adoption of listed FX trading on-exchange,”
Currently CME Group’s FX complex offers futures on 52 different currency pairs and options on 31 currency pairs. Sammann says growth in the exchange-traded FX landscape is significantly outpacing the growth of the OTC market. “This is not to say that there is a market shift, on a zero-sum game basis and that exchange volume is growing because OTC markets are shrinking. That would be the wrong conclusion to draw.”
“If you take our growth rates over the last five years and compare to growth stats on the ECN space and you will find that we have grown at a faster rate.” Sammann notes that that there is a direct correlation between the peaks and troughs of the OTC and exchange-traded markets over the past five years.
He says: “There is a symbiotic relationship between the listed products’ business growth and the OTC growth. When the OTC markets grow, exchange volumes grow and when the OTC markets are shrinking, the exchange markets are either flat or shrinking as well but there is a large differential in the growth rates. Both markets are growing but the exchange market is growing a lot faster. As we grow our business it is beneficial for the cash market participants and as they grow their business it is typically positive for our business as well.”
Factors driving growth in FX on Exchanges
For Sammann there are several key factors driving the growth of volumes in FX exchange traded products. Over the past 18-24 months there has been a much greater appreciation of counterparty risk in the foreign exchange market. Sammann says that traders are much more attune to the risk in the bilateral nature of many of their FX transactions, and with fewer participants available, there has been a growing interest in finding broader pools of liquidity. “By providing the mechanism that eliminates the counterparty risk we can bring together a much more diversified and broad array of market participants, without the risk of endangering transactions or relationships. The central counterparty model has become very interesting for customers to add to the overall pools of liquidity,”
He also believes that the FX market is becoming much more aware of the need, and the benefit, for transparency both for execution, for market data, and also the transparency of the market data that comes out of venues like CME Group.
One of the hallmarks of the exchange model is that everything transacted goes out as market data and Sammann says that customers are seeing that this rich amount of market data can help them make better trading decisions.
Additionally, Sammann says that the continued investment by customers in technology has encouraged the exchange to do so too. Investment has been made in enhancing matching engines, improving matching speeds and investing in technology centres to enable quick, low-latency customer access. CME Group now has matching speeds for foreign exchange that are in the sub-3 millisecond range to cater for customers that are latency-sensitive.
Sammann also believes the broad multi-asset class offering at CME Group is yet another benefit as once the initial connection is made for one product, adding access to other products and asset classes is easy. He says: “It is easy for us to cross-sell customers into foreign exchange, and as FX grows and matures as an asset class in its own right, customers from other asset classes like equities, or interest rates, can move seamlessly into foreign exchange.”
For hedge funds, the access to deep liquidity, low entry and exit costs and competitive execution as well as the guarantees on counterparty risks are attracting these customers to exchanges. Equally, says Sammann, retail investors are just as well catered for. CME Group offers retail investors the same level playing field and access to the same prices as institutional players.
For this reason Sammann says that the auction-style market of the central order book is very attractive to retail traders. “Everyone has access to the same price, on a model that CME Group calls First In/First Out, no matter who you are. This speaks to the integrity of our market,” he adds.
Move towards matching
According to Sammann, there has been a significant shift in the past 18 months in retail and margin trading platforms that are moving away from the dealing desk model to matching systems. “We provide the most fair and transparent markets out there, and the products that are highly liquid and highly electronic are CME Group’s most successful,” he says.
The FX e-micro contracts, launched last year, had further product changes in July, with the introduction of retail-sized futures contracts (one tenth the size of a standard futures contracts) which provide retail customers with a product that has the right risk/reward ratio for them.
For high-frequency traders, CME Group rolled out proximity hosting through a facility called L-Net, a proximity solution that allowed latency-sensitive customers to host their applications close to the CME Globex matching engine. Since then, the exchange has built a co-location facility that will go live in 2012. The application process for the first tranche of customers wanting space in the facility has just closed.
Says Sammann: “This is our next step in latency-sensitive technology innovation by moving from proximity hosting to true co-location, with a facility that is going to be owned and operated by CME Group.”
As well as offering execution-agnostic clearing, Sammann says there is an increased interaction with central order books in foreign exchange and CME Group’s business reflects this. “Customers are looking for execution venues that are linked to clearing, like CME Globex. They are very happy with the matching speed, the breath of products and the safety and security of trades cleared through CME Clearing.”
Options now represents 5-7 per cent of CME Group’s total turnover in foreign exchange, and Sammann believes that there will be an outpacing per cent of growth in options in the next couple of years, particularly because, as products with expiration dates between a month and a year, they are ‘counterparty intensive’.
“There will most likely be more investment in on-exchange options’ trading as more customers become comfortable with electronic trading of options on-exchange,” he says.
Going forward, Sammann says that exchanges will not ‘win’ business exclusively at the expense of the OTC market. “The best thing we can do, to increase our volumes on-exchange, is to get them to add cash to their liquidity pool. Customers at CME Group are not just trading futures and options products, they are trading the OTC market as well, and we are trying to build broader market participation across both futures and OTC because when they add OTC to their futures liquidity, they tend to trade more in both.
Sammann says: “It is a process of globalising and diversifying the customer base. We are not just trying to convert cash traders to futures traders. That just doesn’t work. It is very much the opposite. We take our successful futures traders and make sure they are trading in the cash market as well.”
Impact of regulation
The new leverage rules and clamp down on unregulated margin trading in the US are also expected to spur new growth on the exchanges as retail investors look to currency futures to enable them to gain access to leveraged trades. To this end the North American Derivatives Exchange (Nadex), a retail-focused futures exchange regulated by the CFTC, has developed OTC lookalike contracts to offer fully-collateralised contracts to retail investors.
Yossi Beinart, president and CEO of Nadex puts the size of the retail FX market in the US down to the fact that spot FX, and some commodities, are the only OTC markets that retail investors can trade. Now, the incoming regulation around consumer protection, market transparency and counterparty risk is driving this volume onto exchanges.
He says: “The regulators have made the OTC market less and less attractive to investors. The capital requirements have risen dramatically and immediately wiped out a very large number of firms, mainly through mergers and acquisitions, leaving the spot FX OTC market with about ten major players.” Furthermore, the regulators are now ensuring the leverage is not better in OTC than exchange products, and brokers can no longer compete on leverage as they are all comparably regulated.
New alternatives to OTC products
Beinart says the overall impact is that exchange trading for retail investors in the US is growing fast. Nadex offers two types of products, the binary option and the bull spread, that Beinart says combines the best of both worlds by offering limited risk and high volatility.
The exchange’s binary contracts are all-or-nothing contracts that payout a fixed amount to the side of the trade that finishes in-the-money. Spread contracts offer traders a variable payout structure with controlled risk by limiting the value of each contract at the upper and lower ends of each spread’s range. A trader’s potential loss will not exceed the amount invested, and the potential gain is limited by the contract’s cap (for buyers) or floor (for sellers).
Binaries can offer significant price movements even when the underlying market has very low volatility, allowing traders the opportunity to profit even in quiet markets. Despite their potential volatility, binary contracts are designed to limit the risk to traders so that they get the best of both worlds – multiple trading opportunities with limited risk. Beinart says: “One feature of the OTC market that some customers dislike is the fact that the slightest move against them can result in the immediate liquidation of their position. Even if the market went slightly against them for a brief period and then recovered they would have been ‘stopped out’.”
Some of the strategies offered are very close to OTC spot FX trading, and some are more sophisticated and ‘option-like’. All are highly leveraged, all are strictly limited risk and none can result in a trader being stopped out by an intermediate adverse move. If the underlying market moves adversely beyond the range of the contract – the contract remains live until expiry, regardless of underlying market movement.
A Bull Spread is a single contract equivalent to a daily or intraday call option spread strategy. The Bull Spreads’ settlement levels track the underlying markets within certain pre-set limits. Like Binaries, Bull Spreads cap traders’ exposure, as settlement cannot occur outside the pre-set limits. Bull Spreads will, in general, move in price no faster than the underlying market, and have a payout structure which is variable, rather than “all-or-nothing.”
Making derivatives more accessible
In total, Nadex offers 70 FX Bull Spread contracts daily for each of the five currency pairs traded. Beinart says the exchange has designed its contracts to make them familiar to the OTC market, to make derivatives easier to understand and more accessible.
Launched in October, Beinart says the launch of FX bull spreads has already tripled the volume of spreads traded on the exchange. Also, for the first time in the exchange’s history spreads traded have outnumbered binary options. He says: “The bull spreads are a good and interesting alternative to trading spot forex. We have made the spreads much narrower, and shortened the terms and made them more attractive to investors.”
The exchange currently has about 250 customers that are active, but it is gearing up for growth, and has just finished upgrading its entire technology infrastructure and back office system. “We now have capacity. We have a system that we are confident can sustain 5-7 years of growth,” he says.
Furthermore, by changing its designation earlier this year, Nadex can now expand its reach to new customers much faster by signing up brokers as new members, rather than having to recruit customers directly. Beinart says this change in its distribution model, more akin to a traditional exchange, has already made a dramatic difference to how fast the exchange can grow.
However, he believes it is unlikely that the high-frequency traders will come to the exchange as the small-sized contracts have designed for retail traders and are not suitable.
Beinart believes that the new rules on leverage in the US will dramatically impact, and reduce, the OTC market. He says: “There is a direct correlation between the change in the margin and the amount of trading that is done in OTC forex market.”
Nadex was formed when IG Group acquired the HedgeStreet Exchange in 2007. Re-launched initially as Hedge Street, it was then renamed in 2009.
Beinart says: “Retail customers in the US are used to trading futures on indices, gold and oil and they are used to exchange trading, so we think they will be interested in trading forex as well. There are two kinds of customers we are going after: the OTC forex retail customer and the people trading on exchange in other asset classes through both traditional OTC forex dealers and traditional futures brokers, which are two very distinct market segments.”
Growth in the East
Exchanges in Asia are also experiencing similar growth. Thomas McMahon, CEO of the Singapore Mercantile Exchange (SMX) believes that the unregulated independent FX platforms, enabled by technological advancements and operating in isolation, actually increase the lack of transparency in a market already risky by nature.
He says: “Although there are many non bank or exchange affiliated platforms currently in the market, the costs of trading on such platforms are built into the spreads compared to cost transparency trading on a highly diversified multi-product currency and commodity/other financial instruments exchange.”
He also believes that the sweeping regulation on derivatives trading that are among many other demands now pressing on investors, brokers and traders to enforce stricter risk management policies than ever before means volumes for exchange-cleared FX products will only keep increasing until they will eventually become the standard.
McMahon says that investors coming to exchange trading are looking to trade currency pairs, directly complementing their commercial or non-commercial requirements. They are also currently seeking liquid markets with tight, competitive spreads, and a diverse product range.
“Aside from leading global benchmark pairs, investors these days are also expecting more access to growing niche, regional, and exotic pairs alongside traditional vanilla products, and embedded incentives, such as fee discounts and/or rebates.”
At present, SMX lists Euro-US Dollar futures and has listed some unique contracts such as Brent Crude futures that are denominated in euros and which can serve as a very effective currency hedge with an edge over available strategies in the market at present.
McMahon adds: “Going forward, however, SMX will be rolling out major, exotic and bespoke currency pairs, addressing pan-Asian currency pair demands.”
SMX’s technology backbone is provided by its parent group Financial Technologies (India) which is already at the cutting-edge of tech-centric exchange infrastructure. “Our open architecture is built on ISV partnerships and enables ever-increasing accessibility and connectivity to world-class FX trading platforms and best-in-class high frequency, algorithmic traders and trading systems,” McMahon adds.
He says the SMX platform was designed specifically to be extremely scalable, but robust, at every developmental milestone. By offering multi-currency multi-asset pricing, trading and clearing, market participants gain tremendous cost-savings in terms of conversions, transfers and liquidation.
McMahon believes that in the current regulatory environment FX trading on exchanges is set to become more widely adopted, even becoming the standard, while unregulated FX platforms will diminish. He compares the trend to the move from open outcry exchange floors to the screen and fully-electronic 24/7 brokerages. And with this adoption McMahon believes that Asian exchanges will eventually rank higher among the world’s largest, exchanges, in line with the domino effect of emerging economies on trade and finance.
He puts most of this trend down to the regulatory changes in the OTC markets, which he believes will eventually mean clearing for most FX products. However, He also believes that multi-currency and multi-asset pricing, trading and clearing exchanges will be preferred platforms due to cost-savings in terms of efficient use of collaterals.
Exchanges in India have also experienced dramatic growth in currency contracts. The US dollar/rupee futures contracts traded on MCX Stock Exchange (MCX-SX) and the National Stock Exchange of India (NSE) have soared to become the two most actively exchange-traded currency contracts globally, by number of contracts traded. A third exchange, the United Stock Exchange (USE), launched in September 2010, also offers futures on four currency pairs, including the dollar/rupee. In the first week of trading USE traded 5.64 million contracts.
Although the contracts are small-sized ($1,000) MCX-SX traded 79.4 million contracts in June 2010, while NSE’s contract traded 68.3 million times.
Joseph Massey, MD&CEO, MCX Stock Exchange, says that recognition of the importance of hedging risk in volatile market and currency fluctuations has today’s markets has seen participants in all economies look to the exchanges. He also believes that globalisation will further increase the demand for exchange traded currency products, mainly on account of transparency, liquidity, flexibility of timing, exiting and pricing, cost of hedging and risk coverage.
Massey says: “Indian investors are already highly active in exchange traded currency futures, and will look forward to trading not only on currency options on spot but also currency options on futures as and when introduced in the Indian market. One of the innovations the market is waiting for is the timing of market and whether it should be extended to make these markets available during global timing, as currency markets are most active when the US is open.”
Initially, MCX-SX introduced trading in the single currency pair, USD/INR, and subsequently in Feb 2010, added EUR/INR, GBP/INR and JPY/INR. Massey adds: “MCX-SX enjoys the highest market share in currency futures and the overall currency derivatives segment in India.”
The exchange’s strategic partner, Financial Technologies (FTIL) group, has established itself as India’s pioneer technology company in the financial sector. “We have ensured that our users have all modes of high speed connectivity based on their needs with adequate resilience and fault tolerance. Similarly, as required and also as demanded, we have been providing our users with the necessary solutions for front end trading technology, back office, risk management, mobile trading and algorithmic trading,” says Massey.
India’s telecommunication sector has grown and the exchange’s trading members can now choose connectivity through VSat, leased line or the internet. The trading infrastructures are also well developed, with regulatory permission for trading through mobile phones.
With the increase in cross-border transactions, which currently represent 65 per cent of the total FX turnover, according to the BIS survey, Massey believes that exchanges have a major role to play in terms of offering tighter bid-ask spreads and lower transaction costs. He says: “With the increase of trades denominated in other currencies, as suggested by the BIS survey 2010, we strongly foresee the market for these currencies along with the cross currency-pairs on Indian bourses.”
“Going by the appetite and the growth in India and other emerging markets, more and more standardised products are expected to be introduced and one can be cautiously optimistic about the prospects of this market segment. We also hope that timing of this market can be extended so that Indian industry may cover its currency risk simultaneously, just as it covers its raw material risk on commodity exchanges.”
In May, Brazilian exchange, Bolsa de Valores, Mercadorias e Futuros (BM&F Bovespa) launched five new currency futures contracts for trading. Furthermore, Brazil Easy Investing, an order routing system designed for trading Brazilian equities in foreign currency, has just started to be developed this year to be launched next year. It will enable foreign investors to route orders in their local currencies and provides the simultaneous FX execution for the trading of stocks listed in Brazil allowing non-residents to match stocks in US dollars and other currencies.
José Antônio Gragnani, chief business development officer at BM&F, says: “The strategies have already started this year, to provide differentiated fee tiers for day trade transactions executed by high frequency traders (HFT) . We have also created a high frequency trading committee to approve and monitor the HFTs. Additionally, we are implementing a market maker program in two phases, the first was in November and the second in January, for consolidated volume executed in more than one broker.”
In the Bovespa segment, different tiers will be created for individuals and non-individual HFT investors. In the BM&F segment, the 70 per cent flat discount will be replaced by a volume tiered discount for day trades.
Exchange connectivity and trading infrastructures have been in development since 2008. BM&F Bovespa has provided four modules where DMA 1 and DMA 2 represent, respectively, access through a broker infrastructure and authorised access provider, while DMA 3 offers direct access and DMA 4 co-location, where the client installs its server inside the exchange to allow high frequency trading, under its responsibility and control. Since September, BM&F Bovespa has also offered all options of DMA to the equities segment.
Gragnani says: “We are currently building two new data centres that will replace the five that we currently manage. We are also improving capacity, which is reviewed each year, and for this year, our goal is to double our current capacity to 3 million trades on the equity side and 400,000 on the derivatives side by the end of this year. We want to double capacity in order to offer high frequency traders an even more secure environment.”
The Middle East
In 2009, the Bahrain Financial Exchange (BFX) set up its operations in Bahrain, in advance of its go live in early 2011. The BFX will be internationally accessible to trade cash instruments, structured products and Shariah-compliant financial instruments as well as derivatives.
The BFX CEO, Arshad Khan, says that the growth and turbulence of global trade has given rise to increased exchange rate fluctuations and that currency derivatives play an important role in providing a viable risk management platform to mitigate those risks.
He says: “Users of currency derivatives are primarily interested in trading currency futures and options. Hedgers like the fact that currency futures and options offer them a standardised and simple way of offloading their currency risk without having to worry about market, credit or counterparty risk. Investors are happy to invest in currency futures and options due to their ability to provide leverage and higher potential gains.”
The BFX intends to offer the full spectrum of currency derivatives in due course. In its first phase, the BFX will be launching dollar denominated futures contracts in euro, pound sterling and Japanese yen. The futures contracts will be similar in maturity, size and other specifications to those trading in international markets, providing investors an arbitrage window. The futures contracts would also help hedgers in the MENA region offload their currency risks due to unexpected movements in the euro, sterling and the Japanese yen. “We foresee a lot of potential in our currency futures contracts and are confident of achieving comfortable levels of liquidity for transactions to happen successfully and smoothly,” Khan adds.
The newly-built exchange has chosen to operate on a scalable model ready to accommodate any kind of technological upgrades needed, instantaneously. Khan says The BFX is offering first of its kind services to its members, such as co-location of servers and an onsite trading venue to support highly technology intensive trading strategies.
He adds: “The recent Bank for International Settlements (BIS) survey results reinforce the fact that exchange traded derivatives are here to stay. As trade in goods and services rises and economies start to integrate even more closely, risk management through standardised instruments is only set to rise as a service to mitigate general trading risks. In fact, the total outstanding notional value to June this year has already surpassed the total traded volumes in 2008 & 2009.”
Khan believes plain vanilla futures and options will be the popular choice of instrument for some time. However, at the same time, he adds, institutional investors are evolving rapidly and technology-driven trading strategies will be the differentiating factor in defining access to markets like the BFX.
In Russia, currency trading is also taking off. RTS Group operates the central counterparty, the settlement securities depository and the settlement house for rubles and foreign currencies. International members of RTS include Deutsche Bank, CSFB, UBS, and Morgan Stanley. The Futures and Options on RTS (Forts) market lists 36 futures and 13 options.
Evgeny Serdyukov, director, Forts market, RTS Stock Exchange, says that investors are principally interested in volatile and highly liquid instruments such as the futures contracts on USD/RUB and EUR/USD. He says: “These contracts are interesting to market participants, both in terms of speculative trading and for hedging currency risks, which is sought after during times of financial market downturn. The futures contract on EUR/USD exchange rate has become a popular speculative tool, whereas the futures on EUR/RUB currency pair are popular among hedgers.”
RTS offers futures on USD/RUB, EUR/USD and EUR/RUB exchange rates and options on the USD/RUB and EUR/USD futures contracts. Up until February 2009, RTS only traded futures and options contracts on the USD/RUB currency pair and launched the two further currency pairs in response to investors’ needs. Additionally, the exchange now offers futures trading on the USD/RUB currency pair with settlement on September 15, 2015 -- the longest settlement term among existing instruments on the Russian stock market.
Says Serdyukov: “This five-year instrument was launched due to numerous appeals from market participants who needed long-term hedging of currency risks. Russian enterprises and companies engaged in dynamic foreign economic activities, or who are subject to currency risks, can now plan their financial budget five years in advance.”
The exchange has also launched new contracts for speculators. As E-Forex went to press, futures contracts on GBP/USD and AUD/USD exchange rates were set to be launched and in early 2011 the exchange plans to start trading USD/JPY and USD/CHF currency pairs. Market makers can connect to the exchange using both the FIX and FAST FIX protocols and algo traders are able to co-locate their servers, and get reduced fees for high frequency transactions, as well as access to software for testing their trading algorithms.
Serdyukov says: “FX contracts are among the most promising derivatives instruments in the world. The experience of launching new derivatives on foreign currency on the Asian trading floors demonstrates that these contracts are among the most liquid ones.
“The Russian market is no exception. RTS Stock Exchange is actively developing FX contracts. We see a considerable demand for FX contracts as a result of the Bank of Russia’s coherent policy in liberalising the Russian ruble exchange rate against the US dollar and the Euro, as this leads to higher volatility in the FX market.”
While, for Serdyukov, the subsequent increased volatility from liberalisation in Russia increases the attractiveness of currency futures and options, the growing interest in exchange-traded instruments to both speculate and hedge currency risk is being echoed on all exchanges.
Technology and connectivity developments
Catering for the growing demand for fast connectivity to exchanges, Transaction Network Services (TNS) has specialised in building private networks with low latency. John Owens, Vice President of Exchanges and ECNs, at TNS says: “We are completely agnostic to what venues customers want to connect to. This is something that is advantageous for the market’s players that are looking to exploit the opportunities that are arising in the FX traded space because they really need to make it as easy as possible for the emerging participants within the foreign exchange trading space.”
He says the foreign exchange space has been a huge growth area for TNS over the last 18 months, and that most of the growth has come from the FX ECNs. However, he adds, exchanges are looking to expand beyond their existing customer base.
He says: “We have seen a significant increase in competition amongst equity exchanges looking to bolster revenues that have been whittled away from equities environments by looking to exploit other asset classes. There has definitely been an uptick in interest in the alpha that can be achieved on trading foreign exchange over and above the equities or the fixed income markets where interest rates have been very low and look to remain very low for the foreseeable future.”
The liquidity on exchanges has attracted the high-frequency traders and according to Owens the increase in algorithmic trading and growth in volumes go hand in glove, as witnessed in the equities market.
“The development of algorithmic trading in the equities space and more recently now in the foreign exchange space has been one of the reasons why volumes have increased so significantly over the last couple of years,” Owens says.
“Consequently, all segments of the market have had to adapt to the demands that are being made by the high-frequency traders and hedge funds. This incorporates everything from the trading platforms by reducing the level of latency that exists at a processing level, as well ensuring that network latency is minimised, and the emergence of co-location of liquidity hubs.”
The evolution of co-location has further complicated the myriad of connections trading firms need to manage today for, as Owens points out, even though prop traders may co-locate to be closest to one key trading venue, they, and their customers, still often want to trade, on other venues. “They will want to be able to arbitrage and get out to other markets as well to ensure they are getting good transparency on the global market,” he adds.
This has both been an area of growth for TNS, and an investment, in the development of new low-latency co-location services in London, New York and Singapore.
Direct Market Access
Also, the growth of electronic trading over the past five years has given rise to the demand for Direct Market Access and although from a regulatory standpoint and from a compliance standpoint trades are going through brokers, the exchanges have developed the systems to support their broker participants and members by allowing trades to be routed directly to the exchange.
Owens says: “DMA is a hybrid of both models – adhering to the traditional model of trading through a broker but where the intelligence in the trade decision as to how the trade will be executed is being left to the investment management firm or the proprietary trading firm that is looking to direct that trade through to the market.”
For Owens, the exchanges can learn from what they have done in other asset classes and the significant investment from exchanges in upgrading their technology speaks for itself. Exchanges are also building and adapting platforms to support multiple asset classes, and continuing to invest in lowering latency, developing new order types and accommodating new markets, and now the exchanges have had the experience of building equities and derivatives communities, Owens believes it will be easier for the exchanges to develop platforms to meet the needs of the foreign exchange community as well.