Carlo Palmers Manager, standards development,
Carlo Palmers Manager, standards development,

What role can SWIFT play in facilitating electronic FX trading?

Patrick de Courcy discusses the broad role that SWIFT can play in helping to define and implement the next generation of generic standards for the FX market.

The FX market is in the midst of transition. Consolidation in the front office trading environment, heralded by the internet and betokened by the appearance of competing online FX portals, reached a watershed in April this year with the announcement that Atriax, the electronic trading platform backed by Reuters and a consortium of leading FX banks was to close. Market commentators cited problems of connectivity and poor take-up to explain its rapid demise. A two-year decline in FX volumes could only have exacerbated its difficulties.Downstream in the FX market a new dawn is soon to be glimpsed, with the commercial launch of CLS Bank slated for Q4. A long time in coming, the reduction in settlement risk that CLS will deliver through the final and simultaneous settlement of cross-currency financial transactions will undoubtedly prove worth the wait.The efficiency that CLS brings to cross currency settlement, however, is only one milestone in a USD1.5 trillion a-day market that begins in the front offices of...continued

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