Integral and Jefferies FXPB have made a push into the FX prime brokerage space with the launch of TrueFX, a product the two firms believe will allow buyside firms to access the FX market at “a fraction of today’s trading costs.”
TrueFX’s participants can benefit from one connection to all liquidity sources, as well as lower trading costs and improved workflow through a combination of centralized credit, technology, and liquidity.
The centrally-cleared venue caters to retail brokers, macro hedge funds, prime of primes, and also regional banks. It enables them to connect to all relevant liquidity venues through a single point of credit intermediation and technology integration.
Other benefits for small liquidity takers include the absence of minimum ticket size or clearing fee, as well as easy integration through APIs, OMS, MT4/MT5 bridge, and GUI access.
The spot trading facility, cleared by Jefferies FX prime brokerage, operates a community model that brings a wide spectrum of FX market participants into a single integrated network. The participants tap into a dedicated Integral connectivity network to access more liquidity, either through a direct credit relationship with Jefferies FXPB itself or one of its clients.
“The flow of credit is the lifeblood of the FX market, but market inefficiencies have stalled accessible and affordable credit for many market participants. We are excited to play a pivotal role in addressing this challenge via TrueFX and to collaborate with an industry-leading team at Integral to make this happen,” said Brandon Mulvihill, Global Head of FX Prime Brokerage at Jefferies.
Banks return to the prime broking space
Jefferies has recently stepped up its expansion in the FX prime brokerage (PB) space. The New York-based investment bank offers clients the ability to trade through traditional voice broking methods on its FX centers in New York, London, and Singapore, as well as through flexible e-commerce solutions.
The extension of the relationship between Integral and Jefferies signifies better liquidity access for both firms’ clients. Prime brokers came under scrutiny during the financial crisis as their capital-intensive business inflates balance sheets since they finance their clients’ transactions by extending credit.
The increase in banking regulation, which mandates increased minimum levels of capital and increases in reporting expenses, has resulted in a lot of banks leaving the prime broking space.
“The market has a huge desire to access additional parties with which to trade. We are working on making available all leading sources of liquidity, so clients can trade with everyone through a single connection. TrueFX is built on Integral’s ECN network, which is recognized for its ultra-low latency, high-performance and superior integration. This means trading members of TrueFX can find a streamlined, cost efficient meeting place with seamless onboarding,” notes Harpal Sandhu, founder and CEO of Integral.
Earlier in May, Integral launched TrueFX Streaming, which publishes tick-by-tick historical and real-time market data to all market participants. Users have access to aggregated, dealable bid, and offer prices direct from leading forex and cryptocurrencies venues.