Trading Enablement Standardization Initiative (TESI) extended to FX, building on early successes by TESI in the fixed income markets

Significantly faster enablement of buy-side firms onto electronic FX dealing platforms may soon become reality. This comes thanks to an extension into FX by TESI, an initiative led by a working group of sell-side banks. The Trading Enablement Standardization Initiative (TESI), which today announced its move into FX, aims to streamline the process of enablement used by brokers to permission and connect their clients with online trading venues. TESI is based on FIX, an open industry standard protocol, and will allow brokers to introduce far greater levels of automation to the enablement process than previously possible.

Introducing greater efficiency into enablement is an increasingly important priority for sell-side institutions. At present, this process is highly manual and liable to error. An ever-changing roster of clients also makes it a costly, time-consuming and operationally challenging activity for brokers.

Adopting the TESI open industry standard protocol will allow sell-side firms to integrate their computer-based customer relationship management and permissioning systems directly with electronic trading venues. This will strip out manual work, reduce overheads and speed up enablement times. Better enablement times will also mean that early adopters of the new technology can improve customer service and so gain an important competitive advantage over slower rivals.

The TESI group of sell-side dealers includes BNP Paribas, Credit Suisse, J.P. Morgan, RBS, Societe Generale and UBS. It is facilitated by Etrading Software and the group is working together with a number of well-known FX trading venues including 360T, Currenex, FX Connect and KCG Hotspot. The venture will cover the electronic trading of FX Spot, Forwards, FX Swaps, FX Options and NDFs.

The decision to extend TESI to FX follows early successes by the TESI working group in the fixed income markets. As a result of the TESI initiative in fixed income, brokers, trading venues and other stakeholders have been collaborating to ensure the smooth migration of swaps trading onto Swaps Execution Facilities (SEFs).

Stephane Malrait, Global head of eCommerce, Societe Generale Corporate Investment Banking, commented:

"Adopting a standard protocol for enabling our clients on multi bank ECNs will further expand the way we do business with existing and new customers. Getting a consistent and accurate view of our client trading relationships and requirements in real-time will allow us to respond quicker and provide a better service."

Sassan Danesh, Managing Partner at Etrading Software Ltd, added:

"Enablement speed and accuracy are increasingly influencing whom the buy-side trades with. Early adopters of the new standards will not only gain a key competitive advantage from improved client service, but will also benefit from greater and faster control over their trading relationships in a dynamic market."