• Growing trend to combine on- and off-exchange business
• Major milestone for Eurex’s FX liquidity hub
• Morgan Stanley is a strong proponent of so-called “Exchange-for-Physical” services

The trend towards the listed FX business continues: Today, Eurex announced that Morgan Stanley has entered the listed FX business of Europe’s leading derivatives exchange. As one of the most important participants in the global FX market, Morgan Stanley joins a growing number of market participants at Eurex who are moving their business to the exchange or combining OTC and exchange-listed FX trading by using so-called “Exchange-for-Physical” (EFP) services.

.@MorganStanley has entered our listed #FX business, joining a growing number of market participants at #Eurex who are moving their business to the exchange or combining OTC & exchange-listed FX trading by using “Exchange-for-Physical” services. https://t.co/DmuzPObhEM pic.twitter.com/pFzp8Ixeih

— Eurex (@EurexGroup) July 21, 2022

Especially asset managers are increasingly seeking to combine the depth and flexibility of FX OTC markets with all the benefits of centrally cleared listed FX products. By using EFP services, they can swap OTC trades into exchange-traded and centrally cleared contracts, thus removing uncleared exposure, and optimizing capital allocation.  

Jens Quiram, Global Co-Head FIC Derivatives and Repo Sales at Eurex: “We are delighted to see Morgan Stanley expanding their FX activities at Eurex and offering our EFP services to their European clients. With SA-CCR and UMR regulations coming into effect, these services provide a cost-effective solution to mitigate the impact of these rules. It is a great addition on our way to becoming Europe’s leading FX liquidity hub.”

Richard Condon, Managing Director, Head of FX Investor Sales, Morgan Stanley: “We look forward to working with Eurex to expand our EFP footprint. Asset managers in Europe are recognizing that the EFP mechanism is a simple yet dynamic way to enhance their workflow while deepening their liquidity pool. The intersection of OTC liquidity, FX-specific execution strategies, and high-quality market making all wrapped in a cleared instrument has a powerful value proposition. Central clearing can also reduce the need for bilateral credit, settlement relationships or lengthy onboarding cycles.”

Source: Eurex