Solution Creates Trading Efficiencies in Electronic Foreign Exchange Benchmark Trading
State Street Global Markets today announced that its TruCross/FX platform is now live and available to institutional investment managers.
Announced in May, TruCross/FX is a FX spot benchmark execution product that facilitates the matching of institutional trades at benchmark rates, and is overseen by State Street Global Market's Agency FX unit. TruCross/FX is designed to create efficiencies in electronic FX benchmark trading by reducing information leakage and volatility around benchmark pricing times.
"The Financial Stability Board has recommended the development of industry-led independent netting and execution facilities for transacting fix orders. In addition, the FSB recommended that fixing transactions be priced in a transparent manner and in a way that is consistent with the risk borne in accepting such transactions, TruCross/FX offers just such a facility," said Mark Snyder, executive vice president and head of State Street Global Markets Sales & Trading and Research business. "TruCross/FX offers our clients a transparent, clearly communicated and documented fee structure, and efficient trading solution for their benchmark FX transactions."
TruCross/FX offers an alternative to the present model of bilateral buy-side to sell-side benchmark order submission process. A series of automated daily sessions match buy and sell orders for certain currency pairs which are then priced with reference to the selected benchmark price. Once the benchmark orders are matched, only the unmatched amounts are executed in the market during the period in which the benchmark is calculated utilizing a proprietary algorithm. TruCross/FX will deliver the WM/Reuters mid-rate benchmark rate net of fully disclosed commissions and rate adjustments.
TruCross/FX will be available initially through FX Connect, State Street's multi-bank electronic trading system, and is expected to also be available through other platforms in the future. Institutional investors can submit orders to a session ahead of a fixing with no pre-trade information leakage to the market, their trading counterparties or State Street's principal foreign exchange trading desk. TruCross/FX platform is currently only available to institutional investment managers in the United States, United Kingdom and Canada, with availability in other jurisdictions expected in the near future.