LONDON, June 30 Thomson Reuters is
revising its foreign exchange trading rules, the company said on
Monday, following consultations with market participants.
Foreign exchange, the largest and one of the least regulated
markets in the world, has for the last nine months been the
subject of investigation by regulators around the world for
allegations of price-rigging and collusion between traders.
Thomson Reuters is one of the two dominant global currency
trading platforms, along with ICAP-owned EBS.
"We want to make sure people are using the platform for its
intended purposes - genuine commercial interest in trading - and
ensure that's the kind of liquidity we're getting," said Phil
Weisberg, global head of FX at Thomson Reuters.
After consulting with market participants over the last 12
months, Thomson Reuters is updating its Rule Book, a code of
conduct designed to foster higher trading standards.
This will outline new guidelines for fill ratios, minimum
quote lives, and tick sizes.
Fill ratios measure the proportion of client orders that are
actually executed, the minimum quote life ensures orders are
available long enough for potential counterparties to trade, and
the minimum tick size helps ensure participants place real
orders rather than just expressions of interest.
Britain's Financial Conduct Authority and the U.S.
Department of Justice are investigating allegations that senior
traders shared market-sensitive information relevant for the
London fix, which is set at 4 p.m. London time, using actual
London is the hub of the global currency market, accounting
for some 40 percent of the $5.3 trillion traded on an average
The key benchmark, known as the WM/Reuters fix, relates to
several exchange rates including the euro, sterling, Swiss franc
and yen. They are compiled using data from Thomson Reuters and
other providers, and are calculated by WM, a unit of State
WM Company, a unit of State Street, is the administrator for
the WM/Reuters Service. Through an agreement, Thomson Reuters is
a primary source of rates to WM from which WM applies its
methodology and calculates the benchmark. Thomson Reuters is one
of the various distributors of the rate.
Thomson Reuters is the parent company of Reuters News, which
is not involved in the fixing process.
(Reporting by Jamie McGeever Editing by Jeremy Gaunt)