By Patrick Graham
LONDON, Oct 5 (Reuters) - ICAP-owned trading platform EBS took another step into the asset management sector on Monday with the announcement it had purchased Molten Markets, a specialist in foreign exchange trading technology for funds and other investment managers.
The company gave no value for the deal, which adds to the efforts EBS has made over the past three years to build on its traditional stronghold in interbank foreign exchange trade.
EBS managers said the deal would clear the way for a new push by the company with the world’s biggest asset managers, several of whom they said were already committed to using the full execution and management system it would now provide.
“With the backing of EBS BrokerTec, we already have a number of clients lined up waiting for this announcement, ready to come on board,” said Simon Wilson-Taylor, CEO of Molten Markets, who joins EBS BrokerTec in New York as head of EBS Institutional FX, as part of the deal.
He said Molten Markets’ system, which has to be integrated with infrastructure at banks and asset managers, removes further human elements of the otherwise automated trade that now dominates 90 percent of the $5 trillion a day currency market.
“This is a full execution management system where clients can organise all of their upstream and downstream processes,” Wilson-Taylor said.
“This had largely been a manual process which has been semi-automated by platforms like FX Connect, but it has never been fully digitised. That’s what we’ve cracked with Molten Markets, but in the past we have lacked the scale to fully leverage the solution, this is where EBS BrokerTec comes in.”
Industry data shows EBS and Thomson Reuters are still the dominant players in the interbank trade, which forms a large chunk of the wholesale forex market.
But with those volumes fading in the face of the internalisation of trade at half a dozen major banks, both have been striving to win more of the daily transactions done by asset managers and companies with banks or other parties. EBS already has a buy-side focused product called EBS Direct.
Wilson-Taylor said the top 25 asset managers carried out about 60 percent of the currency trading done by asset management market community and it was these firms that were interested in Molten Markets’ offering.
Justyn Trenner, global head of strategy at EBS BrokerTec, added: “These are very big real money players, and we have a meaningful number of them.” (Editing by Anirban Nag and David Holmes)