CFETS today launches new foreign exchange trading system to trade RMB using Reuters technology

SHANGHAI - China Foreign Exchange Trade System (CFETS) and Reuters (LSE: RTR; NASDAQ: RTRSY) today announced the launch of CFETS’ new foreign exchange trading system. With the use of Reuters Electronic Trading technology, CFETS offers a wide range of instruments, including spot rates, outright forwards, swaps and currency pairs.

To support the evolution of the Chinese foreign exchange market, CFETS chose Reuters to develop its new foreign exchange trading system, following an international tender. Today marks the first day of trading for RMB against foreign currencies over the new system, which went live on 12 March for trading other foreign currency pairs.

CFETS member banks will now be able to access and trade in real-time the Yuan and five global currency pair prices. Banks will have a choice of mechanisms to bid or access prices- one click trading, request for quote or limit orders. Initially there are five currency pairs being offered, the Chinese Yuan against the US Dollar, Japanese Yen, Hong Kong Dollar, Euro, and Sterling.

The CFETS portal is based on a version of Reuters Electronic Trading (RET) platform customised for RMB trading. At present, 21 market-makers have completed the development of the API interface and today they started automated and programmed quotation and trading of the RMB on the new system.

Alex Hungate, Managing Director of Reuters Asia, said: “The new CFETS system paves the way for the RMB and foreign currency pair trading and is an important milestone for the development of the inter-bank FX market. Reuters is honoured to have been able to contribute to the growth of China’s financial markets in what will be a significant evolution for the trading of the Yuan. This successful partnership with CFETS combines their central role in China’s inter-bank market and the global leadership of Reuters in foreign exchange transaction systems.”

Xie Duo, President of CFETS, said: “The new foreign exchange trading system combines CFETS’s deep understanding of the business processes, management and market of the industry and advanced international system development methods and technology. The new system answers the needs of the development of the Chinese market. CFETS will continue to make significant efforts to build market infrastructure including the trading system, enhance service quality and provide the impetus for the sustainable development of China’s inter-bank market.”

Founded in 1994 as an intermediary in the inter-bank foreign exchange market in China, CFETS has built infrastructure for China’s inter-bank market. Since July 2005, when China started to reform its RMB exchange rate mechanism, new inter-bank foreign exchange instruments and trading patterns have been gradually introduced, along with the market-making system.