Market structure enhancements

Successfully supporting FX liquidity and price formation for over 30 years on EBS Market means constantly working with market participants to adapt and improve the platform alongside the ongoing evolution of the FX market itself. Yet as we evolve the platform, our focus remains trained on supporting the needs of natural interest order flows from around the globe, evidenced by the fact that global and regional banks – which comprise 62% of EBS Market volumes – have been continually growing as a share of our trading volumes over the last 10 years.

Most recently, the centralized matching infrastructure established in May 2022 made EBS Market simpler and more accessible while laying the foundation for continued enhancement. The August launch of the Size Priority Matching Algorithm has provided a means of supporting natural interest orders which tend to be of larger size. When shown to the market, these orders reinforce book depth, resilience of liquidity and reduce impact of trades. In addition, EBS Market has now enhanced its Price Discretion Order Type to allow for market participants to price market risk within the CLOB with reduced risk of signalling, allowing for discreet matching of genuine inventory. The feature has gained significant traction in the last two months for major Spot FX and NDF currency pairs.

Further marketplace feedback throughout 2023 has been clear – a more real-time trading environment, faster market data and greater price flexibility are all keys to ensure the primary venue continues to maximise its role in supporting price discovery and risk management. At the same time, those enhancements must not sacrifice the ecological balance that supports diversity and the experience of natural interest participation within the EBS Market structure.

“EBS Market’s plan to provide faster market data is welcomed. We are supportive of the potential improvement in price determinism from the reference market.”

— Paul Buttenmueller, Global Head of EFX Trading, UBS AG

Following such consultation, CME Group is delivering a range of enhancements to its EBS Spot FX, Metals, and NDF central limit order books, aimed at further improving client experience. These include new, faster EBS Ultra Spot and NDF Market data channels, reduced conflation intervals for existing credit screened market data channels, and the deployment of conditional price increments, which allows use of more granular sub-pip price increments subject to an extended minimum quote life in select spot FX currency pairs.

“CME is taking positive steps towards strengthening EBS Market. We look forward to the planned changes and the benefits they can deliver to the FX marketplace.”

— Asif Razaq, Global Head of FX Automated Client Execution, BNP Paribas

We are excited with the support received from our clients towards helping us bring efficiencies to the marketplace and remain committed to deliver on their requirements.

View the recent notices on EBS Market enhancements here. To connect to EBS Market for trading and access to spot FX, precious metals and/or NDF central limit order books, or for details on the planned enhancements, please contact FXTeam@cmegroup.com.