02.05.2014
By Terry Flanagan

EBS Direct Launches Precious Metals Trading

EBS, Icap’s electronic FX business, has launched trading of precious metals on EBS Direct.

Customers can trade gold, silver, platinum and palladium against the U.S. dollar and the euro on EBS Direct. More than 40 customers have committed to trading precious metals. Société Générale Corporate & Investment Banking (SG CIB) has completed initial trades on the platform as a liquidity provider.

“We are proud to be the first providers of liquidity for precious metals on EBS Direct, further cementing our partnership with EBS,” said Azeem Malik, head of e-business metals markets at SG CIB. “Our initial trades have gone well and we look forward to increasing the volume of trades with EBS.”

EBS Direct provides relationship-based disclosed liquidity alongside EBS Market, the company’s anonymous matching platform for spot FX. Liquidity providers are able to stream tighter, tailored prices direct to liquidity consumers and offer greater inventory via a flexible, scalable and cost effective platform that integrates easily with existing trading systems, according to the company.

EBS Direct is a relatively new offering that runs on the EBS platform as a disclosed relationship-based trading offering. “It allows liquidity providers to offer bespoke pricing through a cost-efficient platform to any customers they choose,” said Jeff Ward, global head of EBS Direct. “It’s a multi-dealer platform using the same infrastructure that we have for EBS Market, which is a central limit order book. We started EBS Direct with FX, NDFs, and now precious metals, largely due to customer demand and because that’s where our core strength lies.”

EBS Direct is now live with 12 liquidity providers and more than 400 customers have committed to using the service. “We will also likely add EBS Direct support through the Icap SEF to allow U.S. persons to trade NDFs on EBS Direct as they do on EBS Market today,” Ward said. We have a pipeline of another 20 liquidity providers that we expect to have on the platform this year.”

EBS Market is a central limit order book, anonymous matching platform, which has been central to the spot FX marketplace for over 20 years, according to Ward. “EBS Direct leverages that trader desktop presence in 50 countries, 3,000 workstations and 400 API connections, to allow relationship trading,” he said.

With EBS Direct, a customer gets to choose from liquidity providers in a disclosed mutual relationship-based model, rather than a central limit order book. The liquidity provider, in turn, gets an efficient means to offer liquidity to customers that are accustomed to using EBS as part of their trading workflow.

“EBS acts as a distributor of various liquidity providers’ pricing,” said Ward. “Consumers of liquidity get high-quality aggregated liquidity which they can trade on. We conducted a beta of EBS Direct last year with a small number of liquidity providers and consumers, while we built a brand new, purpose-built order routing infrastructure, which went live in November. The first product we started with spot FX, which has gone very well and has experienced monthly gains in volume.”

Ward continued, “Precious metals is a natural extension and it’s quite easy for us to add spot precious metals onto the EBS Direct platform. Societe Generale is the first liquidity provider. We’ve signed up 45 customers for precious metals trading on EBS Direct, so customer demand is the main driver and we will continue to add new features and functionality to the platform.”

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