FinTechAutomationEuronext acquires FastMatch for move into global FX markets

Euronext acquires FastMatch for move into global FX markets

The pan-European exchange is paying US$153m to gain a 90% stake in the electronic communication network for foreign exchange trading.

Euronext, the pan-European stock exchange, is paying US$153m to acquire a 90% stake in FastMatch, which it describes as “the fastest-growing electronic communication network (ECN) in the spot foreign exchange (FX) market”. The deal is subject to regulatory and anti-trust approvals and is expected to close in the third quarter of 2017.

Euronext added that the acquisition transaction establishes its presence in the FX segment – the largest market globally, diversifies its top line, accelerates its growth profile and allows the group to extend its “best execution” value proposition to an additional asset class.

“The acquisition of FastMatch breaks new ground for Euronext, through expansion into the FX market which is the world’s largest traded asset class,” said Stéphane Boujnah, chairman and chief executive officer (CEO) of the managing board of Euronext NV. “This will broaden the spectrum of products we provide to capital market users, whilst meaningfully diversifying our revenue and creating long-term value and growth for customers and shareholders.”

Since it was established in 2012 by Credit Suisse and the retail FX broker Forex Capital Markets, aka FXCM, FastMatch has been able to establish a sizeable position in the ECN space. Since 2015, it has more than doubled its market share, growing average daily volume (ADV) by 52% in 2016, whilst achieving technological and operational independence from Credit Suisse and FXCM.

In a strategic rationale explaining the acquisition, Euronext commented: “The G20 post-credit crisis response has created a regulatory drive for over-the-counter (OTC) and dark trading towards transparent, neutral and centrally cleared markets. New capital requirements further underpin an urgent need for greater efficiency and deep structural change of the OTC landscape.

“Nowhere is this more relevant than in the US$5.1 trillion daily FX market. This new environment, driven by regulatory changes and the client’s need for more transparency and efficiency has resulted in a clear trend of electronification of spot FX trading where 66% of trading in 2016 was electronic, growing from 55% in 2010.

“FastMatch is a disruptive institutional FX ECN providing customers access to large pools of diversified spot FX liquidity at unparalleled speed. With colocation in three data centres – London, New York and Tokyo – FastMatch offers clients the fastest, most scalable and versatile technology available in the market.”

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