MOEX Launches DMA Service for OTC FX Markets

Moscow Exchange has launched a direct market access (DMA) service to use OTC services on MOEX’s FX and Precious Metals Markets.

The service will expand opportunities for banks, brokers and non-financial companies as market participants can make spot trades in G10 currencies at prices quoted by major global banks with settlement through MOEX’s central counterparty (CCP), the National Clearing Centre (NCC).

The service, Linking with Foreign Liquidity Providers, was launched using NTPro platform technology in order to reduce latency and rejection rates, thereby increasing the speed and quality of OTC trades execution.

MOEX has also expanded the list of instruments available as part of FX market OTC services from this month onwards. The venue offers EUR/USD and GBP/USD swap transactions through the Request for Stream (RFS) functionality, delivering quotations from leading global banks providing liquidity, with settlement through the CCP.

Market participants are also able to clear OTC swap transactions with the CCP executed via OTC e-platforms, something that was previously only available for spot instruments.

The exchange stated the new functionality will improve liquidity management and minimize credit and settlement risks by leveraging reliable exchange and settlement infrastructure.

MOEX has also announced additional access to global gold market liquidity for Precious Metals market participants as spot transactions at London gold market prices (Loco London, an XAU/USD instrument with T+2 settlement) and gold/US dollar swaps are now available. Trades are executed in an automated mode via the central counterparty, subject to the single limit and netting of liabilities.

It was in July 2020 that Moscow Exchange agreed to acquire a 17% stake in the company behind the development of the proprietary OTC FX platform NTPro and has agreed to consolidate ownership of up to 100% of NTPro’s parent company BierbaumPro over a period of three years.

NTProgress was launched in 2016 and quickly became one of the leading platform solution providers on the Russian OTC FX electronic market, with a client base of more than 30 banks. The platform offers solutions for liquidity aggregation, matching, and algo execution across a wide range of FX instruments.

The acquisition will expand both companies’ service offering and allow the two parties to offer clients NTPro’s highly flexible advanced FX trading solutions alongside MOEX’s clearing and settlement facilities.

FX trading volumes continue to decline at major institutional platforms as industry figures show the interest faded somewhat in the third quarter of the year following the pandemic investing boom.

The meltdown in financial markets over the virus has sparked a jump in MOEX’s FX trading volumes since early 2020 as people traded more. Still, the Russian bourse has just reported an 11 percent drop in its monthly volumes, which came in at RUB 23.0 trillion ($315 billion) in August 2021. That compares to RUB 25.8 trillion in July.