Credit Suisse is seeing growing demand for a new service launched by its Advanced Execution Services (AES) business in the wake of changes made to the calculation methodology behind the WM/Reuters 4pm London fix on February 16.
The product, known as AES FX Benchmark Services, offers a fully segregated algorithmic execution service for those clients wanting to execute at the fix without any possible conflict of interest with a bank’s principal trading desk.
“We have adapted one of our existing algos to handle orders over the 4pm fixing window, but it’s more than just the algo element that is attracting clients. We have a segregated process to handle these orders using an agency model and provide matching opportunities using our AES technology,” says Evangelos Maniatopoulos, Global Head of AES FX product and trading at Credit Suisse. Among the changes made to the fixing process in February, following recommendations by the Financial Stability Board last year, was the widening of the window on which the calculation is based from one minute to five minutes.
Many banks are also now charging clients to execute orders at the fix. “Fee charging methodologies vary among banks but this space is evolving rapidly. We benefit from having the technology and the segregation between AES and the traditional FX business already in place,” says Maniatopoulos.