FXecosystem Readies FX Network Launch

NEW YORK-Officials with foreign exchange (FX) connectivity provider FXecosystem plans to take its FX extranet for banks, buy-side traders and FX ECNs live in July with three buy-side clients and 10 liquidity providers.

The platform's hub-and-spoke network topology allows users to configure their network gateways once and then establish network cross connects to other counterparties on the network within three hours, claim vendor officials.
The New York datacenter hosting the cross-connection facility is located equidistance between New York City and the six transatlantic submarine cable landing stations on Long Island, N.Y., according to officials. The vendor rolled out a similar facility outside of London. FXecosystem officials are mulling over the possibilities of deploying additional facilities in Tokyo, Hong Kong or Singapore, but it depends on client feedback, says Jock Percy, a spokesperson with the vendor.
According to Percy, New York clients can host their servers within the FXecosystem datacenter for slightly less than what firms are paying for a single 256 Kbps leased line to a counterparty and receive a full 46-U server rack, including power.
FXecosystem has relationships with 23 telecom carriers, meaning that it can find the most efficient route-at times using multiple cable systems- to ensure ultra-low-latency messaging performance. "If you have 23 carrier relationships and you are ambivalent to which datacenter you connect to then it is frictionless," adds Jon Vollaemuere, a London-based spokesperson for the vendor.
"FXecosystem is attempting to solve a problem we've had in the past in terms of speed to market for connecting liquidity providers over dedicated communication circuits," says Kelly Adams, CTO at New York-headquartered currency fund FX Concepts. "Their business model makes sense and can potentially save time and money for buy-side and sell-side participants. We look forward to participating."
Vollaemuere says he expects that the cost savings will draw a number of banks to the new networking platform. "Some of these [banks] are paying anywhere between $200,000 and $400,000 a month for connectivity," he adds.
A secondary benefit of adopting the FXecosystem platform is that it will reduce arbitrage opportunities, according to vendor officials. "My access to the prices in London and New York are much faster than before, the likelihood of being picked off is much less," says Vollaemuere. "For ECNs, it's a similar thing. The ECN that has the fastest connection, and therefore the lowest slippage, will automatically get much more business than the other ECNs do."

Saima Farooqi