ICAP signs $65m deal with China interbank market platform

Markets operator and provider of post-trade risk mitigation and information services ICAP announced on Friday that China Foreign Exchange Trade System has chosen it to deliver the underlying technology for fixed income and foreign exchange electronic execution services in mainland China.

The FTSE 250 firm said CFETS - China’s official interbank market trading platform and infrastructure provider - has been planning its so-called Next-Generation Trading System for a number of years.

It said ICAP was chosen to cooperate with CFETS on the core trading components of the system, which will enhance its capability 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, through a localised EBS BrokerTec graphical user interface.

The deal, valued at $65m over a three-year period, will be delivered by ICAP division EBS BrokerTec, and will see the company expand into China with EBS opening a local office and development centre in Shanghai.

CFETS and ICAP have already collaborated successfully for more than nine years since the founding of Shanghai CFETS ICAP - a joint venture to provide broking and information services in the onshore and offshore interbank foreign exchange, money market, bonds and derivatives market.

ICAP’s board said this partnership marked the next chapter in the long-established relationship, and allows EBS BrokerTec to accelerate its product development.

“This is a hugely exciting project for EBS BrokerTec and we are looking forward to working with CFETS to shape market development in the Chinese FX and fixed income trading markets,” said Gil Mandelzis, CEO of EBS BrokerTec.

“CFETS' decision to use EBS BrokerTec technology to launch NGTS is a resounding endorsement for the quality of our technology and our role as a trusted provider of trading infrastructure and venues globally, across multiple asset classes.”

Executive vice president of CFETS, Xu Zaiyue, said they were consistently driving their independent technology development with various resources from around the globe, and the introduction of technology from EBS BrokerTec was an important part of the Next-Generation Trading System project.

“The platform architecture conforms to the latest standards and has been approved by external technology experts.

“With acquired intellectual property and source code, CFETS' technology platform will be greatly enhanced and strengthened,” Zaiyue explained.

“I am glad that as our partner, EBS BrokerTec is helping us to achieve our goal.

“I firmly believe NGTS will become one of the most important infrastructures of China's renminbi market and provide strong and steady support to the development of China's interbank market and globalisation of the renminbi.”