Refco launches web prime brokerage using Currenex

Refco has offered an offline prime brokerage service, called FX Clear, since 1999, but had run into a number of issues common to the industry, said Gary Weiss, president of Refco F/X Associates in Chicago.

"Previously our prime brokerage service was primarily a manual, phone-based process," he said. "The online model offers greater and more efficient access to multiple counterparties and provides straight-through processing."

The new system - white labelled from multi-bank FX portal Currenex - automates the ‘give-up’ of trades, so the bank-to-prime broker and prime broker-to-client deals can occur instantaneously, said Bob Garzilli, New York-based chief operating officer of Currenex.

Refco’s system is based on Currenex’s enhanced market access trading system, which allows clients to gain access to multiple dealing counterparties on a request-for-quote (RFQ) basis. Refco acts as an intermediary, providing the clearance, back office and customer service requirements on a fee basis. "There is enough margin to keep fees low and attractive on a value-added basis," said Weiss.

The broker is not aiming to bring in new clients by gaining access to Currenex member banks, he added, but rather looking to offer an improved prime brokerage service for its existing and prospective clients.

Users can currently trade spot and forwards FX transactions. Variable or fixed split arrangements on bulk transactions and multiple levels of fee or commission accruals are also enabled on the new system. Dealers can trade with any of 45 Currenex member banks without requiring multiple credit lines, said Weiss.