Change Summary

Background

  • To improve trading and operational efficiencies in the FX market, EBS will consolidate the existing two NDF trading liquidity pools (on-SEF/on-MTF and off-SEF/on-MTF) into a single liquidity pool on the EBS UK MTF.

  • Since June 2023, US persons can trade on the non-SEF market through an offshore branch. The expansion in access allows US persons to trade on EBS UK MTF by following the EBS prime trading model, where the qualified offshore entity of the US persons trade with BrokerTec Europe Limited (BEL MTF) via a PrimeBroker.
  • As the changes in regulatory requirements helped US clients to trade on non-SEF markets, the SEF market became redundant. This allowed EBS to move all NDF trading to the MTF market.
  • Refer to EBS Legal Entity and Regulatory Structure for more info and EBS NDF Single Liquidity Pool for the impacted OnSEF instruments.

Affected Venues

Change

  • EBS will no longer support NDF pricing and trading on the SEF market (NEX SEF entity); as all NDF trading will move to the MTF market under BEL MTF (MIC: XEBS). All NDF instruments on the EBS Market segment of the NEX SEF (MIC: NEXS) will be suspended from trading.
  • EBS Market (CLOB) operates Spot FX and precious metals markets under the legal entity EBS SERVICE COMPANY LIMITED (MIC: EBSC)
  • NDFs operated under the same legal entity venue as Spot and Precious Metals until 2013. 
  • In 2013, a Swap Execution Facility (SEF) called NEX SEF (MIC: NEXS) was launched to address regulatory requirements in the US. 
  • US-located clients began trading “on-SEF”, while EMEA and APAC continued trading “Off-SEF” on the legacy venue. 
  • In 2017, the Off-SEF instruments were migrated to a separate regulated venue, a Multilateral Trading Facility (MTF) called BEL MTF (MIC: XEBS). 
  • Late last year, the CFTC reaffirmed the no-action relief previously given to MTF venues, allowing full access from US participants (previously restricted to accessing only SEF venues.) 
  • This cleared the way for CME to merge all NDF trading onto the MTF, thus removing bifurcation from the NDF market. 

Single Liquidity Pool (SLP) Timeline: Beginning 30 September 2024, EBS Market NDFs will no longer trade on the NEX SEF and the BEL MTF; all NDF trading will happen on the BEL MTF. 

  • No changes will occur to existing MTF trading, connectivity or venue setup. 
  • SEF trading will no longer be allowed (order entry disabled)
  • SEF will remain live for contingency purposes  

Timeline

  • 13th September 2024 - New Release - SEF NDF instruments will be suspended.
  • 13th September 2024 - New Release/ UAT - MarketFactory changes in UAT to allow clients to process EBS NDFs as UKMiFID RegulatoryBodies [future behaviour] or MiFID RegulatoryBodies [current behaviour].
  • 30th September 2024 - Prod - SEF trading will not be supported on the EBS Market. All NDF trading will be on the BEL MTF.
  • 30th October 2024 - Prod - MarketFactory clients must adopt EBS NDFs as UKMiFID RegulatoryBodies.

Whisperer Client Impact

Whisperer clients will no longer be able to consume NDF prices from the EBS SEF market, and cannot trade on the EBS SEF market.

OnSEF MarketData sessions will not be available for clients to connect. SEF NDF instruments are suspended from trading, so EBS will not disseminate market data for SEF instruments and will not accept orders for SEF instruments.

MarketFactory will use this opportunity to enable clients to process EBS NDFs more accurately to reflect the entity where the NDFs are traded. Please refer to the Change Details section for more info.

To help clients transition to process EBS NDFs as RegulatoryBodies.UKMiFID, clients have the option to process EBS NDFs as RegulatoryBodies.MiFID until the 30th of October.

Clients are advised to contact the MarketFactory Delivery Team to ensure they are upgraded to 2024.09.10.WE release or later before the 30th of October, as per the timeline above.

Change Details

MarketData and DropCopy:

Clients will start to receive UKMiFID RegulatoryBodies in SecurityStatus and ExecutionReport messages for NDFs, as the MTF market is registered under BEL MTF, a UK entity.

Once Whisperer clients adopt EBS NDFs as UKMiFID RegulatoryBodies, clients should ensure RegulatoryBodies.UKMiFID flag is set to TRUE in NDF MarketDataRequest.

Whisperer API will disseminate an ErrorReport if:

  • Clients attempt to send NDF MarketData subscription requests without RegulatoryBodies.UKMiFID flag set to TRUE.
  • Clients attempt to subscribe to NDF MarketData with RegulatoryBodies.SEF or RegulatoryBodies.MiFID flag set to TRUE.

Orders:

Whisperer clients cannot submit orders on the EBS SEF market.

Once Whisperer clients adopt to process EBS NDFs as UKMiFID RegulatoryBodies, clients should ensure they do not send NDF orders with SEF or MiFID RegulatoryBodies. The only supported RegulatoryBodies flag for NDFs is UKMiFID.

Whisperer API will disseminate an ErrorReport if clients attempt to send NDF orders with SEF or MiFID RegulatoryBodies.


Documentation