Cboe FX Markets has announced plans to launch Cboe FX Central, a new central limit order book (CLOB) designed to bring competition and innovation to the FX market. The service will be an all-to-all market in which all liquidity in the order book is firm, meaning it is instantly executable by all clients.
To be launched on June 29, 2020, the central order book will offer to trade in spot EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, USD/CHF, and USD/CNH.
Bryan Harkins, Head of Markets at Cboe Global Markets, said: “We believe there is a unique opportunity to improve upon the two central limit order books that currently exist in the FX market by providing a new central limit order book built on great technology and a unique market model designed to incentivize and democratize FX liquidity provision and market data.
Jonathan Weinberg, Head of Cboe FX, commented: “With no average daily volume requirements, Cboe FX Central provides a more democratic model to access real-time data than the current primary markets where real-time data is provided to those that execute a certain monthly volume threshold. Any market participant on Cboe FX Central, regardless of the size or volume of its trading activity, is able to earn faster market data on Cboe FX Central on an order-by-order basis. Additionally, this model incentivizes liquidity providers to improve the quality and depth of our order book, benefitting all market participants by their receiving better prices for their orders.”
Built on the traditional CLOB model, the central order book rewards liquidity providers (LPs) with faster market data when their liquidity is at or close to the best bid or offer (BBO), creating a deeper order book, which in turn benefits liquidity takers. Cboe FX Central market data will be available at three different speeds (real-time, 3-millisecond delay, 10-millisecond delay) and the speed at which market data is delivered is determined by where the LP’s liquidity is relative to the Cboe FX Central BBO. All orders in the book are subject to a minimum quote life of 25 milliseconds and orders are executed on a price (displayed then hidden) / time priority.
Cboe FX’s suite of trading services now includes a firm order book (Cboe FX Central), sweepable order book with the curated firm and non-firm liquidity (ECN), and full amount trading which provides clients with a solution for larger order risk transference with low market impact (Full Amount).
