CME Group has announced the introduction of CME FX Spot+, a comprehensive spot foreign exchange (FX) marketplace. The new platform leverages FX Link, a liquid and tradable spread between over-the-counter (OTC) spot FX and CME Group's FX futures, to bridge liquidity across the two trading environments.
The company plans to release the new offering for client testing in late 2024. According to a press release by CME Group, this service will be accessible through the CME Globex network, including existing EBS Market Globex connectivity. This arrangement ensures seamless and integrated access for the global EBS spot FX customer base to this unique and additional liquidity pool.
Paul Houston, CME Group Global Head of FX Products, commented on the launch in a press release by CME Group. "Alongside our FX futures and our EBS offerings, this new spot FX marketplace - and its unique connection with our FX futures liquidity – is the latest example of how having futures and spot markets at CME Group can support accessible, centralized liquidity within the highly fragmented FX market," said Houston. He added that "CME FX Spot+ will increase access, transparency and trading opportunities across spot FX and FX futures markets, which will benefit market participants across both venues."
According to information on the CME FX Link webpage provided by CME Group, it outlines that the FX Link serves as a reservoir of firm liquidity designed for foreign exchange swaps. It integrates into existing OTC workflows with nine major foreign exchange Prime Brokers actively involved in securing credit lines with leading bank foreign exchange entities. Integrated post-trade messaging is streamlined through Traiana, RTN, and IHS Markit. The visibility of FX Link extends across multiple platforms. It is described as the first-ever anonymous and automated link connecting CME FX Futures with the OTC foreign exchange Marketplace. The system provides advanced tools for managing foreign exchange exposures while facilitating convenient access to the capital efficiencies inherent in foreign exchange futures.