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Barclays Capital
5 The North Colonnade, Canary Wharf, London E14 4BB, United Kingdom
Contact: William Lloyd
Phone: 44-20-7773-9668
Fax: 212-609-4701
E-mail: William.Lloyd@barcap.com
Web Site: www.barcap.com
Barclays Capital is involved in a number of electronic-trading consortia, developing multiparticipant trading sites. It is also developing several standalone dealer-client systems. From a "click-and-trade” point of view, says William Lloyd, a director at Barclays, the bank is focused on foreign exchange, European credit and sovereign trading, derivatives, futures and the front end of the yield curve.
Citibank
390 Greenwich Street, 5th Floor, New York, NY 10013
Contact: Niccola Boyd, FX marketing manager
Phone: 212-723-6649
E-mail: niccola.boyd@ssmb.com
Web Site: www.citigroup.com
CitiFX Chief Dealer, Citibank's currency offering, allows bank clients to trade spot, forwards and swaps for over 100 currency pairs and crosses.
The system is fully automatic: a central pricing engine sends prices to all the e-commerce systems. Citi currency traders, however, may adjust the rates through manual intervention to reflect market movements and other factors. Clients can ask for live pricing through the system or request execution against CitiFX Benchmark fixings, which are based on snapshots of interbank rates taken several times during the day. They can request single or two-way prices, and can have trade details routed directly to their back offices. Customers can also look at their daily outstanding positions on-line, with real-time reports promised soon. Users have a choice of interacting with the system through a browser or through an XML-based interface.
Vikas Srivastava, CitiFX's global sales manager for e-commerce, sees Atriax, a multibank system of which Citibank is a founder, as a complementary product for clients, and expects volume on its own system to increase as multibank systems encourage more institutional customers to move on-line. He believes, however, that individual bank sites will remain critically important. "Price is just one of the things that the client is looking for,” he says. "Process efficiencies such as automation, accuracy, fairness, transparency and STP are important as well. There are also times when you may not want the whole market to see your deal, especially on large and sensitive trades that you don't want to simply throw into the market.”
Although the firm posts daily currency volatilities and other option-based reports on its system, it will not be offering currency options dealing until the second or third quarter of this year.
The site also offers a variety of customized research tools, including Citiflows, a weekly report that examines all the global flows coming through Citibank, as well as optimization tools and value-at-risk models. In the future, the firm is planning more integrated solutions such as AutoFX, a product currently in production that combines FX dealing and custody services.
Credit Suisse First Boston
11 Madison Avenue, New York, NY 10010
Contact: Lillian Lin
E-mail: Lillian.lin@csfb.com
Web Site: www.csfb.com
CSFB's PrimeTrade gives customers access to futures exchanges around the world, as well as spot and forward foreign exchange and electronic dealing, and government and corporate bond dealing. Overall, it is one of the more all-encompassing interdealer e-trading bank portals already up-and-running. (See review)
Deutsche Bank
31 W. 52nd Street, 13th Floor, New York, NY 10019
Contact: Joe Norena, head of foreign exchange e-commerce
Phone: 212-469-2700
E-mail: www.db.com and fxmarkets.com
Unlike some banks that are trying to develop a unified trading portal across all product lines, Deutsche Bank has divided its e-commerce initiatives separately by market sector, but under a single "db markets” banner.
The bank appears to be farthest along in its currency trading initiatives, which include fxmarkets.com and fxmarkets B2B. At fxmarkets.com, Deutsche clients can electronically request and trade on real-time currency prices, as well as receive a selection of bank research. Fxmarkets B2B extends this to other web-based market transactions—often on a white-labeled basis—so e-merchants can automatically price their products in a variety of currencies, and then convert actual sales back into home currency terms in real time.
In addition, the bank offers Autobahn, a dual pricing and execution platform for the fixed-income markets, and is an active participant in multidealer systems such as Tradepoint, Euro MTS, TradeWeb, BondClick and Brokertec.
Goldman Sachs
Peterborough Court, 133 Fleet Street, London EC4A 2BB, United Kingdom
E-Commerce Team
Phone: 44-20-7552-5050
Web Site: www.gs.com
Goldman's Web.ET is an Internet-based electronic-trading system for the fixed-income and currency markets. Launched in September 1998, the first product traded was U.S. Treasuries—and now the company trades 70 percent of its Treasuries via Web.ET. The system also covers U.S. agency bonds, European government debt, European credit, U.S. corporate bonds, Japanese government bonds, U.S. commercial paper and foreign exchange. By the end of this year, most of the firm's 17 fixed-income, currency and commodity products will be traded via Web.ET.
In November 1999, the system launched foreign exchange trading, offering live prices for spot, forward, swaps and options. The system has traded more than $17 billion to date.
JP Morgan Chase
Contact: Jonathan Gray
Phone: 212-834-5292
E-mail: jonathan.gray@chase.com
Web Site: www.chase.com
In addition to several electronic-trading consortia, Chase is active in dealer-client electronic trading. Its preeminent effort is ChaseBond, an Internet-based new-issue platform for fixed-income securities covering corporates and sovereigns; asset-backed, mortgage-backed and other structured transactions; domestic, international and emerging-markets issuance; dollar and nondollar currencies; and investment-grade and high-yield securities.
ChaseDeal, its corresponding trading system, provides fully electronic trading and straight-through processing, research and analytical tools, and live pricing of corresponding swaps. There is also a separate derivatives research site, with cross-discipline research coming soon.
Lehman Brothers
3 World Financial Center, New York, MY 10285
Contact: Jonathan Firester
Phone: 212-526-3139
E-mail: j.fireste@lehman.com
Web Site: www. lehman.com
Lehman offers dealer-client trading for most fixed-income products via proprietary systems and via two multidealer platforms, TradeWeb and MarketAxess. TradeWeb offers trading and straight-through processing in U.S. Treasury and agency securities and European government bonds. MarketAxess covers U.S. corporate bonds. LehmanLinks, meanwhile, provides links to the world's securities exchanges and electronic communication networks.
Merrill Lynch
4 World Financial Center, 31st Floor, New York, NY 10080
Contact: Dan Alfaro, vice president for media relations
Phone: 212-449-6468
E-mail: dan_alfaro@ml.com
Web Site: www.ml.com
Merrill Lynch has been active in dealer-client electronic trading for years. The bank's MLX system offers full order execution in U.S. equities, municipal bonds, commercial paper, corporate bonds, Treasuries (available this quarter) and European government bonds. It also provides analysis and commentary, analytics and other content for a variety of derivatives products.
On the equity side, the firm is focusing on four areas: portfolio trading, convertible bonds, equity derivatives, and structured retail and wholesale products such as certificates, warrants, Spiders and so on. The primary focus is on European certificates and warrants. It will soon be releasing MLXnet, an on-line tool that allows European wholesalers to transact certificates and warrants with Merrill electronically.
Portfolio trading clients get access to a variety of pretrade analytics, and can then execute transactions electronically, with orders routed straight from their trading desks to the floor of their preferred exchange. Clients have a choice of using a fat client with rich pretrade functionality or a thin-client version, available through the firm's MLX system. New-issue information for convertible bonds and all equity debt capital markets products is available through IDEAL, a system that displays prospectuses and road show presentations.
The focus in equity derivatives is on pretrade and post-trade analytics. Clients have access to a blotter that provides information on confirmations, and where their deals are in the documentation stream.
The firm's effort in interest rate derivatives is organized around composite pages for U.S. dollar, sterling, euro, yen and Aussie/New Zealand dollar. Clients get live trader commentary, research reports, live swaps pricing with graphical representations of the yield curves and comparisons with past yield curves. Analytics include a swaps calculator that allows users to modify notional principals, cash flows and other variables necessary to price noncontingent cash-flow structures. There is also a set of data tools for swap rates, forward rates, rate strips and their histories, and volatility matrices. The firm plans to release calculators for swaptions, caps and floors, and new composite pages for Swiss francs and G-4 swaps.
In credit derivatives, Merrill will soon be offering market indications for all the major markets, organized geographically and by investment grade, noninvestment grade and sovereigns. It will also offer a rich set of historical data for default swaps from a third-party provider, and a default swaps calculator.
State Street
225 Franklin Street, Boston, MA 02110
Contact: Stephen Best
Phone: 617-664-0310
E-mail: sabest@statestreet.com
Web Site: www.statestreet.com
In 1995, State Street launched FX Connect, one of the first sites that allowed institutional investors to trade foreign exchange on-line. Last March, the firm expanded its functionality to multibank dealing with Deutsche Bank joining as one of the first participants. FX Connect is part of Global Link, State Street's e-finance network that allows clients to trade currency, fixed-income, futures, equity products, and money market and investment funds directly with more than 23 banks worldwide. The firm has signed up more than 260 buy-side clients and claims that more than 15 of the world's largest 20 cross-border asset management firms are actively using the system.
Clients can access a variety of research, analytics and pricing tools, and can execute a trade with a broker-dealer of their choice. Requests for prices must be sent to each bank individually; the system is not designed to offer multibank quotes. After the trade, custodian banks are automatically informed about trade settlement and other details.
The system is particularly useful for portfolio managers who have to manage allocations to scores of fund accounts. Clients can enter all of their trades onto a single blotter, request two-way prices and show dealers their blotter information. State Street has offered a full trade order management system for currencies for several months, and plans to release a fixed-income version by the end of the first quarter.
The bank also offers Quick FX, a simpler, point-and-click system for hedge funds, corporates and others that don't have to concern themselves with portfolio allocations.
UBS Warburg
Bahnhofstrasse 45, Zurich, SZ CH-8098, Switzerland
Web Site: www. ubs.com
In addition to joining a number of electronic-trading consortia, UBS's KeyTrader product offers straight-through processing in global equities, via links with more than 50 exchanges around the world. The bank also offers live quotes in various derivatives products, including warrants, futures, options, structured products, foreign exchange and money-market products. (See review)
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