By Nia Williams
LONDON Nov 13 Currency trading platform EBS
will change pricing in the euro/Swiss franc pair, owner ICAP
said on Tuesday, limiting high-speed traders' ability to exploit
price discrepancies at the expense of banks.
From Nov. 26 the platform will price euro/Swiss in
half pips rather than tenth pips, bringing the pair into line
with changes made to other major currency pairs in September,
interdealer broker ICAP said in a statement.
Foreign exchange dealers welcomed the move, saying changes
to pricing in other currencies such as the euro and yen were
already beneficial. They saw little impact on the Swiss National
Bank's cap on the franc at 1.20 francs per euro from this move.
"We are noticing we are doing a lot more business through
EBS because there's more liquidity at each price point," said
Graham Davidson, director of FX trading at National Australia
Bank in London.
The fifth number after the decimal point in the euro/Swiss
franc price will now be a half pip - a zero or five - rather
than a number between one and 10.
The technical changes have been designed to address banking
clients' complaints that tactics used by high-frequency traders
Market players said those complaints have contributed to the
recent decline in trading volumes on EBS and rival Thomson
Reuters dealing platforms.
Banks take issue with trading firms that post orders to buy
or sell at prices that they do not intend to trade at, thus
gleaning information about their rivals' trading intentions.
That strategy is more expensive under the new pricing.
EBS chief executive Gil Mandelzis said there had been a
reduction in this practice of "price flashing", and there would
be further moves in future to limit disruptive market practices.