Thomson Reuters leaving foreign exchange (FX)
The Eikon platform upgrade with new trade capabilities is to be the new trading platform for foreign exchange options due to Thomson Reuters exit of the foreign exchange options matching business.
Thomson Reuters is to leave the foreign exchange (FX) options interbank matching business in a strategic decision aimed at diverting more resources to the development of new post-trade services designed for the FX options market.
“While a decision has been made to exit the interbank matching business, focus and attention for FX options is now fixed on the Thomson Reuters Eikon platform. We are currently working on a new solution for FX options that will ensure we offer a service that is the best fit for this market,” the company said in a statement.
The FX options matching service has been available for approximately five years, but has not achieved the targets set by the company.
The decision to exit the business has been considered yearly since launch, according to a source close to the group.
The final decision was driven by a market change mainly related to regulatory aspects.
“Upcoming regulatory change is one of the factors that will have the biggest impact in the FX options market. There is still a lot of uncertainty around it, and we are focusing on these changes to plan how to enhance our services in the next 12 months. For us, regulation is the big factor in determining how we move forward,” a Thomson Reuters spokesperson said.
For the past several years Thomson Reuters has not seen the shift it expected from voice to electronic broking in FX options. The company said it now expects the market to be supported mainly by voice rather than electronic broking as the level of liquidity in this market has always been lower than for spot and forward matching. This explains the decision to shut down the interbank matching business.
The group said it remains committed to the FX options business. “FX options are and will remain a very important part of our business. This decision will help us to focus on other parts of our FX options business,” the spokesperson said, in particular on the Eikon platform.
As part of the investment the company recently appointed Shanker Ramamurthy as president of sales and trading for Thomson Reuters Markets.
“The appointment marks a commitment at Thomson Reuters to accelerate the growth of its sales and trading business, support the ongoing development of Thomson Reuters Eikon [and] increase its participation in electronic trading marketplaces,” the company said in a statement.
Commenting on the decision to leave the FX options matching business, the spokesperson added: “The Thomson Reuters Eikon platform includes FX options, where the enhancements we are planning include trade capabilities.”
Although Thomson Reuters declined to comment on their possible relocation it is understood the strategic decision will affect a team of approx 20 people.
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