It’s coming down to the wire for the launch of the latest forex trading venue, FastMatch, which will start matching orders on July 1.
The new business is a joint venture between FXCM and Credit Suisse in which FXCM provides retail forex order flow as well as the starting corporate infrastructure for FastMatch. For its 40 percent equity stake, Credit Suisse will provide order flow. But more importantly, it also provided its Crossfinder source code that powers the banks dark liquidity venue.
FastMatch made some the necessary tweaks to the equities matching engine to prepare for its life in forex trading.
According to Galinov, the median wire-to-wire round trip latency for order acknowledgement is approximately 95 microseconds while 99.9 percent of the volume will have latencies below 165 microseconds.
In terms of market data, the new venue will version 4.2 of the FIX messaging standard over TCP/IP to deliver the bid, ask and last trade data to clients.
This low-latency performance, combined with it being housed in Equinix’s IBX NY4 data center in northern New Jersey, should help attract liquidity to the new market, Galinov says. By the end of the year, the company plans to have a footprint in Equinix’s LD4 data center outside of London as well. It’s far too early to discuss a footprint in the Asia-Pac region, he adds.
Unlike some of the current forex ECNs, FastMatch will offer a four-in-one market where there are four separate “trading rooms” that each have their own trading rules. FastMatch sets the trading rules that target retail, “GUI clickers,” and general forex traders. The fourth room houses bank-to-bank trades and the participating banks set the rules for this room and will review them semi-annually.
For example, the bank-to-bank room requires a quote life of least 200 milliseconds and no anonymous trading while the general room allows trading anonymity and no minimum quote life.
Leading up to the launch, FastMatch beta tested its platform with trades from FXCM and Credit Suisse as well Blue Fire Capital, Virtu Financial and a few other non-disclosed high frequency traders and hedge funds.
Between its launch and September, FastMatch expects to round out its order offerings by adding support for pegged and market orders.