<p>EBS, the CME Group-owned provider of electronic trading platforms and technology
services in foreign exchange markets, has said it will by default deny
<a href=”https://www.financemagnates.com/terms/l/liquidity-providers/” class=”terms__main-term” id=”fd90fbbf-614f-4d02-b500-72b78ab4dc6e” target=”_blank”>liquidity providers</a> not signed up to the FX Global Code access to its EBS
Direct liquidity pools starting from April 1st. The step is part of the firm’s update
to its liquidity provider eligibility criteria for EBS Direct.</p><p>EBS Direct is the company’s relationship-based and quote-driven forex
trading platform. On the other hand, <a href=”https://www.financemagnates.com/institutional-forex/fx-global-code-of-conduct-building-on-five-years-of-progress/” target=”_blank” rel=”follow”>the FX Global Code</a> is a set of
guidelines first published by the Bank of International Settlement’s Foreign
Exchange Working Group in 2017 to promote the integrity and effective
functioning of <a href=”https://www.financemagnates.com/forex/” target=”_blank” rel=”follow”>the wholesale FX market</a>.</p><p>In a statement released on Monday, EBS Direct explained that the measure is
targeted at accelerating the industry’s shift towards full compliance with the
Code. However, the FX services provider noted that clients will still be able
to maintain relationships with disabled liquidity providers if they choose to
and after they “proactively opt to do so.”</p><p>EBS Makes Other Rulebook Changes</p><p>According to EBS, other changes to its rulebook will include reducing
its ‘<a href=”https://www.financemagnates.com/terms/l/last-look/” class=”terms__secondary-term” id=”8336db6f-fdd1-4c69-8f88-c7bc1933336f” target=”_blank”>last look</a>” thresholds from 200 to 30 milliseconds as part of an update to
its dealing policy. The Global Foreign Exchange Committee (GFXC) defines ‘last
look’ as a practice used in electronic trading where a market
participant has a final opportunity to
accept or reject a trade request made on its quoted price. In
2021, GFXC <a href=”https://www.globalfxc.org/press/p210818.htm” target=”_blank” rel=”follow”>published a new guidance paper</a> on ‘last look,’
providing further clarity to market participants about the appropriate usage of ‘last look’.</p><p>Giving further details on the policy changes, EBS explained that it decided on the update after its detailed review of trading on EBS Direct showed that the
average ‘last look’ hold times in 2022 were just 12 milliseconds and 96% of
volumes were with liquidity providers that have stated their adherence to the
FX Global Code.</p><p>In addition to the previously stated changes, the electronic trading
platforms provider also said that it was working towards enhancing its
transaction cost analysis tools. These are reporting tools that track the
quality of orders’ transaction prices and compare them to market
conditions. The prices are tracked either at the time the orders were
submitted or after the trade have been executed.</p><p>”As a market-leading platform for FX spot and forward liquidity,
the changes we’re announcing today for EBS Direct will accelerate the industry
shift towards FX Global Code compliance,” noted Jeff Ward, Global Head of
EBS. </p><p>Ward further explained that while the company’s new trading rules will create
“minimum standards” for its market, the new transparency tools will help
the ecosystem evolve.</p>
This article was written by Solomon Oladipupo at www.financemagnates.com.
