End of forex brokers CME & Reuters join forces

Quote from MiamiHurricanes:

Yep, deliberate - other than they could sweep and shatter all bucket MMs, period. For that reason alone, you would think they would do it.

But the concept of a centralized spot currency and spot currency options market is not in the banks interest - which is why it has not happened to date. It would be like having a centralized high yield, distressed, and convertible bond market.
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Actually Reuters was waiting for a board vote for the new venture. Things work a little different across the pond.

Currently, FXmarkspace is in beta testing. Beta gold is set for Dec/Jan.

As far as not in banks best interests that's not entirely true. Centralized clearing and credit reduces their costs and risk exposure. Among a few other things. The largest banks have already signed up as FXmarketspace participants. The exception being Deustche bank.
 
Here is the latest content from About Us www.fxmarketspace.com

________________________________
FXMarketSpace: An Overview
FXMarketSpace is the first centrally-cleared OTC foreign exchange (FX) trading platform. It was formed through a 50/50 joint venture between two FX industry leaders, Reuters and CME to serve the evolving needs of the FX market, including speed, efficiency, centralized clearing and complete anonymity.

A Powerful Combination
FXMarketSpace represents the combination of a central counterparty model and clearing function of CME, with the global distribution network and straight-through processing capability of Reuters. It is supported by market-leading technology which offers elements not found in any other FX platform:
* centrally cleared OTC trading
* fully anonymous execution
* choice of access
* industry-leading matching engine

Meeting the Needs of a Changing Market
FXMarketSpace is targeted to meet the growing FX needs of banks and other financial institutions including traditional asset managers, proprietary trading firms, leveraged funds, overlay currency managers, hedge funds and CTAs. It is designed to provide increased price transparency, introduce trading anonymity, and heighten FX market accessibility. Combined, these three features hold enormous potential to deepen FX market liquidity and market efficiency for the next generation of FX trading..

FXMarketSpace offers participants unprecedented access to its platform through a variety of means including:
* CME's iLink API
* Reuters Dealing 3000 and Reuters 3000 Xtra desktops
* Reuters standard transactions API
* Select Independent Software Vendors (ISVs)
* eFX portals of participating clearing member firms

Providing Access to All Major Currencies
FXMarketSpace will initially support spot FX transactions in six major currencies against the U.S. dollar: the euro, Japanese yen, British pound, Australian dollar, Swiss franc and Canadian dollar. Four cross currency pairs will also be supported.
_______________________________

Any more off the record info? EX: IB plans to integrate FXMarketSpace if it becomes a serious market presence. TIA
 
from the cme website


-At launch in early 2007, FXMarketSpace will provide high-velocity trading of spot FX in major currencies on CME Globex, together with the safety of a full clearing guarantee provided by CME Clearing.-

my question is ... what happens if globex goes down for a few hours someday ?

and if it never goes down or offline ( except for their normal offline hours ) how much more additional liquidity will
CME forex futures traders of the major pairs be seeing
in the different times of day ?
 
I have some bad news for retail traders regarding FxMarketspace. It will not be available retail traders. I have exchanged several emails with their representative and they will be institutional only.

They are proposing a secondary anonymous platform that their participating banks may be able to offer to their prime trading account holders but that is the only potential access at this time.

The only possible benefit that retail traders may gain is from the existing retail brokers joining and perhaps passing the benefit of the additional available liquidity on to its traders.
 
"FXMarketSpace is targeted to meet the growing FX needs of banks and other financial institutions including traditional asset managers, proprietary trading firms, leveraged funds, overlay currency managers, hedge funds and CTAs. "

To me, it is not a matter of retail vs. institutional - it is a matter of sell side only vs. sell side & buy side. The above statement indicates that it will be open to the buyside. For example, IB customers can access IDEAL Pro. To the MMs on IDEAL Pro, they see IB. IB customers see MMs and other IB customers... When I have talked with FXMarketSpace, they don't seem to get this nuance. I am not looking to represent myself as a MM on FXMarketSpace, just trade on it via a broker. A lot of brokers should switch to the market when it comes on line if it is viable - the same way they added access to NASDAQ, ISLD, ARCA, etc. The whole point from the buyside perspective is having more access to buyside order flow and less sell side in between. That is how equites, options, futures trade.

"The only possible benefit that retail traders may gain is from the existing retail brokers joining and perhaps passing the benefit of the additional available liquidity on to its traders."
- The competitive nature of the brokerage business should drive this along well enough.
 
Quote from MiamiHurricanes:

" I am not looking to represent myself as a MM on FXMarketSpace, just trade on it via a broker. A lot of brokers should switch to the market when it comes on line if it is viable - the same way they added access to NASDAQ, ISLD, ARCA, etc.
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According to the FxMarketspace representative that will not be an option. You will not be able to buy and sell contracts with against FxMarket space on your IB or any other platform. It will have its own, seperate platform in a closed network. While it will be operated by Globex, it will not be available to Globex futures Traders in any form. You are either a member or you are not. And the requirements are set up to eliminate individual traders. It is set up to be institutional only with specific requirements. Here is a quote from their representative.

"FXMarketSpace will be FSA regulated. This would result in it being an institutional only platform and all counterparties must meet the FSA market counterparty criteria and the CFTC's ECP criteria which includes minimum gross assets. All Institutional traders must be registered with FXMarketSpace. "

This is their origional intention. Maybe it will morph into something private traders can access. I hope so. The demand is obviously there and it would be a tremendous source of revenue for whomever could make it happen. In fact, they can consider me as good as signed up.
 
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