Global asset manager Russell Investments and Integral Development Corp, announced today the launch of Russell FX Network (RFX Network), a new end-to-end trading solution for the buy-side netting, execution and allocation of FX transactions.
After the revelations of the 4PM London Fixing Rate scandal, there is growing interest from participants in the FX market to change how closing rates are calculated, or find ways to verify they are not being taken advantage of by their bank brokers-traders.
RFX Network is designed to help institutional investors, including asset managers, obtain FX rates that seek to minimize tracking error with respect to the rates published by WM/Reuters. It allows buy-side firms to automate execution of complex trade lists by combining internal netting within an investor’s trading portfolio with external matching amongst the larger buy-side community.
The developers say users can benefit from advanced netting, process automation and best execution while minimizing market impact of their orders. Investors can place orders electronically into RFX or have Russell process them on their behalf. Fixing orders are matched with other investors, while any unmatched residual is executed by a trading algorithm that mimics the Fixing process to minimize tracking error.
Joe Hoffman, Director, Equity Derivatives and Foreign Exchange at Russell Investments, said, “RFX Network provides institutional investors with a revolutionary way to transact their benchmark orders and improve execution at fixing times. This new offering follows a long tradition of innovation from our global implementation team, providing clients and the broader institutional investor community with a comprehensive solution.”
“Everyone is aware of the challenges our industry has faced the past year with regard to Fixing,” said Harpal Sandhu, CEO, Integral Development Corp. “Combining Russell Investment’s deep understanding of FX markets with Integral’s award-winning technology results in a fair, transparent, and efficient way for the buy-side to execute complex trade lists and reduce Fixing-related risk. Russell is one of the most highly regarded fiduciary managers in the world. We are excited to work with them to bring excellent service to the asset management community.”
Hoffman added, “Russell is in a unique position to help plan sponsors and asset managers manage their fiduciary responsibilities involving executions that historically have been costly to trade and difficult to evaluate.”