China Foreign Exchange Trade System (CFETS) is the only organisation licensed to trade foreign exchange in China. CFETS member banks will benefit from a real-time, internet-based foreign exchange multi-bank portal, thereby facilitating the growth of FX trading in China. The financial institutions which have the permission to trade foreign currencies will be able to trade streaming executable FX prices contributed by 10 price making institutions. The FX prices are provided by leading global institutions namely ABN AMRO, Bank of China, Bank of Montreal, Citic, Citibank, Deutsche Bank, HSBC, ICBC, ING and the Royal Bank of Scotland.
This CFETS portal will enable Chinaâs foreign exchange market to begin trading of eight foreign currency pairs - the U.S. dollar against the Euro, Yen, Hong Kong dollar, Sterling, Swiss franc, Australian dollar and Canadian dollar, plus the Euro versus the Yen.
CFETSâ portal is based on a customised version of Reuters Electronic Trading (RET) platform and is deployed in its data centre in Shanghai. With Reuters Electronic Trading, CFETS can now offer its member banks access to executable prices from leading global liquidity providers and thereby allow domestic financial institutions, that may otherwise not had the credit, to trade in the international currency markets.
The 10 liquidity providers contribute competitive executable prices on a âbest bidâ and âbest offerâ basis. CFETS also offers a full trading, settlement and clearing facilities to all its members and market makers. Domestic banks in China can leave orders, request a price or execute FX transactions with a single click for any of the non-RMB currency pairs quoted on the portal.
Mark Redwood, Managing Director, Reuters Automated Dealing Technologies, said: "Reuters is pleased to have been chosen by CFETS as their preferred supplier to customise and deliver this multi-bank portal. Reuters has not only met the tight delivery timeline set by CFETS, but also worked with the liquidity providers to ensure a successful delivery. Reuters is committed to meeting the increasing technology, connectivity and information needs of the global forex marketplace and we believe that this is just the beginning of a new era in electronic trading in China."
Serena Wang, Managing Director, Reuters China, said: "We are very proud to be associated with CFETSâ multi-bank portal launch. This is a historic event for both Reuters and CFETS as it marks the beginning of a relationship that we hope will grow from strength to strength. CFETS customised Reuters Electronic Trading solution will enable it to expand its foreign exchange business and introduce greater transparency while providing a foundation for future growth and expansion."
Steven Metzler, Executive Director, Technology Alliances - FX, ABN AMRO, said: "We are pleased to partner with CFETS to be one of the first international financial institution liquidity providers for this important new eFX trading platform for the Chinese market. ABN AMRO has been present in China for more than 100 years and we are committed to playing an active role in the development of Chinaâs financial markets."
Mr Sun Xiaofan, Chief Dealer, Bank of China, said: "Bank of China has long been an active partner of China FX Trading Centre. This time, we join each other, together with some major banks home and abroad, to launch the CFETS live trading platform, which we believe will further enhance our traditional edge in FX trading, and more importantly, provide better access to liquidity for those small and medium-sized domestic financial institutions. And, with our extensive global network and local advantages, we are also made the sole settlement bank for all the participants of this system. We will work closely with all parties of this project to ensure it is a full success. We think this will greatly contribute to the healthy development of the domestic FX market."
Rod Jones, Executive Managing Director, International Capital Markets, Bank of Montreal, said: "The CFETS multi-bank portal will help to build a link between the domestic and overseas markets and trading in internationally traded currencies will give CFETS a very good international profile. More importantly, the liquidity from this portal will create market efficiencies and greater transparency in China."
Ms.Wang Wenhua, GM, Treasury Department, CITIC Industrial Bank, said: "This CFETS FX trading platform will further promote the development of Chinaâs financial market. As a liquidity provider, CITIC Industrial Bank will enhance the cooperation with member banks through this trading platform, and provide better service to our clients."
Richard Stanley, CEO, Citigroup China, said: "This is an exciting moment and Citigroup is very pleased to participate in this project. This system will help the banks to conduct their foreign exchange activities more effectively and improve the liquidity of the foreign exchange market in China."
Michele Wee, Vice President, Corporate & Investment Banking at Deutsche Bank, said: "The CFETS - FX platform allows liquidity providers such as Deutsche Bank to provide streaming FX prices with one-click trading, order module and RFQ functionality. This new platform will encourage development of Chinaâs FX market and provide opportunities for both Deutsche Bank and CFETS member banks."
Hong Gao, Vice Director, Dealing Room, International Department, Industrial and Commercial Bank of China, said: "It is our honour to help establish the domestic foreign exchange market and to be its market maker together with the top FX banks within and outside China. Weâll meet the need of its development through our business operation in the future. The launch of the interbank FX market will help to quicken the establishment of the FX market in China and help build an exchange rate mechanism for the Chinese currency."
Alistair Reid, Managing Director, Head of Financial Markets Sales, Asia at ING, said: "With the initial introduction of eight trading pairs, we believe that in due course the system will develop further including forward contracts and other Asian currencies. The CFETS system allows banks such as ING to further develop and leverage their existing trading platforms while building a partnership relationship with customers not normally served by international banks."
Dr Charles Q Li, Country Head China and Branch Manager, Shanghai of The Royal Bank of Scotland, said: "The new CFETS FX trading platform is part of Chinaâs continued efforts to establish a market-driven FX rate mechanism and will provide a platform to introduce further market-based operations and products. As one of the major players in the global FX market, RBS is glad to be able to play a similar role in Chinaâs financial centre, Shanghai and to strengthen relationships with local member banks."
Reuters Automated Dealing Technologies business specialises in providing leading-edge technology to financial institutions and their customers to conduct FX and money-market transactions in a real-time environment. The group has provided Reuters Electronic Trading solutions to over 90 leading global financial institutions including ABN AMRO, Bank of America, Bank of New York, Dresdner Kleinwort Wasserstein, HSBC, UBS, amongst others.