ICAP has agreed a 65 million USD deal with China's inter-bank market trading platform and infrastructure provider China Foreign Exchange Trade System (CFETS). Icap-owned EBS BrokerTec will provide technology for fixed-income and FX electronic execution services in China Icap-owned EBS BrokerTec will provide technology for fixed-income and FX electronic execution services in China.
Over the next three years, ICAP, through its subsidiary EBS BrokerTec, will roll out the underlying technology for fixed income and foreign exchange (FX) electronic execution services in mainland China. Its technology will be used for core trading components of CFETS' so-called Next Generation Trading System (NGTS), a project currently in development, and aimed at enhancing CFETS' capabilities. Once launched, the new system will deploy a localised EBS BrokerTec Graphical User Interface to offer central limit order book and disclosed trading models for FX spot, forwards and swaps and a disclosed trading model for cash bonds to the onshore renminbi market.
ICAP's deal with the CFETS, which is owned by the People's Bank of China, is another step in its push into the provision of technology and related services. Long known as an interdealer broker, ICAP last year sold its voice broking business to rival Tullet Prebon and is rebranding as NEX Group. ICAP's venture capital arm, Euclid Opportunities, has invested in a number of fintech startups, spanning collateral management, regulatory reporting, messaging and data management.
Michael Spencer, Group CEO of ICAP described the NGTS project as a "significant platform which will play a key role in the future of the renminbi."
ICAP already operates a joint venture with CFETS in Shanghai, providing broking and information services in the onshore and offshore interbank foreign exchange, money market, bond and derivatives market. The joint venture, called CFETS ICAP Shanghai, was founded nine years ago.
EBS BrokerTec is an electronic FX and fixed income business.