EBS Market Introduces Tailored Order Books on CME Globex for FX NDFs
EBS Market is set to enhance its offerings on CME Globex by launching On-MTF NDF tailored order books. These new products will be available to EBS UK MTF customers starting Sunday, January 26, 2025 (Trade date: Monday, January 27, 2025). Regulatory approvals are pending.
Key Features of the Tailored Order Books
The tailored order books enable relationship-based trading in FX NDFs on CME Globex. These markets rely on bilateral credit relationships established between Liquidity Providers and Liquidity Consumers.
Credit Structure:
- Liquidity Providers and Consumers can establish direct, bilateral credit relationships.
- Liquidity Consumers cannot have credit relationships with other Consumers.
- Liquidity Providers cannot establish credit relationships with other Providers.
This unique configuration differentiates the tailored order books from existing EBS Market On-MTF NDF instruments. It enables more structured trading dynamics.
Requirements for Participation
To access the tailored order books, clients must obtain new CME Globex Firm IDs (GFIDs). These GFIDs are specific to these instruments and cannot be used for trading in any other CME Globex markets. This requirement ensures a streamlined and exclusive trading environment tailored to the needs of FX NDF participants.
Functionality and Support
The tailored order books offer the same functionality as the existing EBS Market On-MTF NDF instruments on CME Globex. This includes support for all features currently available to EBS Market users.
Effects on Brokers
This update will have these effects on users:
Enhanced Control Over Credit Relationships
Brokers gain more control by defining specific bilateral credit relationships with Liquidity Providers or Consumers. This eliminates the risk of unintended credit exposures.
Improved Liquidity Management
The structured approach ensures that brokers can rely on predefined credit arrangements. It makes liquidity sourcing more predictable and efficient. This reduces operational risks and improves transaction reliability.
Exclusive Trading Environment
With new CME Globex Firm IDs required, brokers access an exclusive market for tailored order book trading. This specialization reduces market overlap and provides a focused trading environment for FX NDFs.
Seamless Transition to New Instruments
The tailored order books retain all existing functionality from EBS Market On-MTF NDF instruments. It allows brokers to adopt the new system without learning additional processes or tools.
Better Risk Mitigation
By preventing credit relationships among brokers, the new model minimizes exposure to potential counterparty defaults within the broker community.
Potential for Competitive Advantage
Brokers leveraging the tailored order books can offer clients more customized and secure trading solutions.
About EBS Market
Electronic Broking Services (EBS) is a wholesale electronic trading platform for the foreign exchange (FX) market. Major FX market-making banks founded it in 1990. EBS facilitates trading in currency pairs like EUR/USD, USD/JPY, and USD/CHF. It also offers electronic trading for spot precious metals such as gold and silver.
EBS Market is part of the CME Group. In 2018, CME Group acquired NEX Group, which included EBS Market. This acquisition integrated EBS’s electronic foreign exchange trading platform into CME Group’s suite of financial services. As a result, the EBS Market now operates under the CME Group umbrella.
About CME Globex
CME Globex is an electronic trading platform operated by the Chicago Mercantile Exchange (CME) Group. It was the first global electronic system for trading futures and options. Globex enables traders worldwide to execute transactions nearly 24 hours a day, five days a week. It offers access to varied asset classes, including commodities, equities, and currencies.
Summing Up
The model ensures structured and efficient trading by emphasizing bilateral credit relationships. This initiative highlights EBS Market’s commitment to innovation in liquidity management and relationship-based trading.
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