Goldman Sachs has become the latest sell-side institution to join derivatives exchange Eurex’s listed FX futures business as a trading and clearing member.
The investment bank has joined the FX business at Eurex as a trading and clearing member. It will also act as a liquidity provider for off-book transactions, as part of the deal.
Eurex, part of Deutsche Börse Group, said the addition was a “major milestone” in its ambition to become a listed FX liquidity hub in Europe.
“With block trades and EFPs, we can offer access to OTC liquidity while transacting in a listed instrument,” said Joseph Nehorai, global co-head of futures, Goldman Sachs.
“Increasing funding and capital costs evolving in FX markets are leading to a growing appetite to move towards listed FX derivatives. This enables the buy-side community to enjoy the advantages of OTC trading and centrally cleared derivatives.”
Recent regulations such as SA-CCR and UMR alongside the geopolitical effects of the last few years have been shifting FX activity away from over the counter and on-exchange in recent years.
Using a bilateral trading relationship to access OTC liquidity alongside a fully cleared FX contract is becoming increasingly essential, Eurex said in a statement, allowing traders to swap OTC trades into exchange-traded and centrally cleared contracts.
“Goldman Sachs’ engagement both as clearing member and liquidity provider will enable even more clients to benefit from listed FX liquidity at Eurex,” said Jens Quiram, global head of FIC derivatives and repo sales, Eurex. “This is another major milestone on our way to expand Europe’s leading listed FX liquidity hub.”