ParFX Releases Free Offshore Renminbi Data

The USD/CNH pair went live on Sept.14 following an extensive testing period, in response to demand from banks and the buyside to be able to trade the currency in an environment protected from high-frequency trading.

In order to adhere with the ParFX's core principles of "fairness and equality," all participants will receive the market data at the same time, via a feed which is delivered from a single connection point in London to customers of the ParFX trading platform, says Roger Rutherford, chief operating officer at ParFX.

In addition, the offshore renminbi data is available free-of-charge in order that no firm is unfairly disadvantaged. The data will be used by some of the world's largest FX trading banks, asset managers and trading firms, who want to ensure fair and transparent pre-trade price discovery in the wholesale FX market, Rutherford adds.

The ParFX system is different from other foreign exchange marketplaces, Rutherford says, as the platform has no market data revenue stream to speak of. "ParFX data is compelling, not just from a content perspective, but also from a value perspective because it's part of the cost of connectivity and trading. ...We charge a low standard connection charge, which includes market data...whereas other platform providers charge a premium. It's all about driving growth and participation within our market and not give anyone an advantage over another."

Offering at cost market data does more than just help firms with less resources, it levels the playing field by taking away the significance of speed, Rutherford says. "ParFX and its founder banks have always believed the only differentials should be intelligence and trading strategy. Disruptive trading behaviour, which is often reliant on ultra-low latency connectivity, has promoted an unhealthy emphasis on speed as the main factor of success. The distribution, cost and methods of accessing of market data are very much symptoms of this."

The addition of the offshore renminbi is part of an ongoing effort by ParFX to boost the number of tradable currencies on the platform, in response to the banks which govern the platform including Deutsche Bank, JP Morgan and Morgan Stanley, as well as insights from its management team. Rutherford says that there was a clear mandate from the Chinese government to take the offshore renminbi international. As a result, it was important to create an environment through which participants could trade fairly and transparently, he adds.