NEX ‘Rebalancer’ lets FX prime brokers automate ECN credit

NEX Optimisation, which helps clients reduce complexity and optimize resources across the transaction lifecycle, launched an automated credit rebalancing tool that specifically addresses limit over-allocation by prime brokers. Rebalancer went live across five major ECNs on 2 July 2017, with further platforms going live throughout the year.

Designed in close partnership with Citi, Rebalancer enables dynamic allocation of credit across client trading venues, enabling clients to move credit from one platform to another in real time. Prime brokers currently allocate credit to multiple trading venues but do not have the ability to move it around if there is excess credit on one and a shortage on the other. Rebalancer leverages existing ECN limit capabilities to dynamically allocate credit wherever the client trades.

Rebalancer considers the clients overall net position across all venues. If the client has offsetting positions, that is if they have directional positions on each platform but are flat overall, then Rebalancer automatically extends credit. Once the net position is no longer flat, the rebalancing tool withdraws this credit. As a result, prime brokers can extensively reduce the amount of excess carve out at each ECN, capping exposure in the event of a negative event such as a technical issue or faulty algorithm.

Read the full release 

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