EBS delays migration to CME Globex following member requests

The planned migration of EBS Market to CME’s Globex infrastructure has been delayed by six weeks, after some market participants raised concerns they would not be ready following recent market volatility.

The replatforming of EBS Market and the EBS eFix Matching Service will now go live on May 16 instead of April 4, according to a members notice from CME. Originally set to be completed at the end of 2021, it is the second time the migration has been delayed. CME stated in October last year that the go-live would be postponed to give market participants additional readiness and ensure a smooth transition.

However, market participants have been rocked by volatile markets following Russia’s invasion of Ukraine, which has disrupted operations and hampered the ability of some banks’ FX trading teams to focus on the transition.

“EBS is fundamentally committed to providing a trusted primary market which our clients can rely on, especially in times of market stress. We do not want to introduce any additional potential operational risk while our clients’ resources are focused on the crisis in Ukraine,” the notice said.

“In addition, a number of clients have asked us to consider briefly delaying the migration date as they are now experiencing temporary IT freezes or a reallocation of internal resources. Therefore, while many of our clients do remain ready, we believe the best path forward for our entire EBS community is to provide this additional time so our May 16 migration is as successful as possible for everyone.”

EBS will extend and continue to operate its weekend mock tests, while the early access trading environment will also be extended through the close on May 13, before the hard cut-over.

Meanwhile, the upgrade of EBS Direct, its disclosed quote-driven marketplace, to EBS Direct 2.0 will also be delayed by six weeks.

Volatility has increased significantly across FX markets, not just in ruble but also across safe-haven currencies including the yen and Swiss franc. Meanwhile, macro concerns over Europe’s reliance on Russian energy and the potential delay to widely anticipated interest rate hikes sparked a devaluing of the euro, as it fell to a yearly low of 1.085 against the US dollar on March 7, before recovering to 1.095 on March 15.

Since February 24, EBS remains the only trading platform that has kept trading in Russian ruble spot and non-deliverable forwards open.

“It’s during times like these where clients consider us as the primary marketplace for certain currencies, including offshore ruble, and it really shows the importance of having a central limit order book model where natural interest FX can be executed,” says Jeff Ward, global head of EBS.

The migration of EBS Market to CME Globex has been touted as one of the biggest technology replatformings for the FX market in recent years.

EBS will transition from a ‘follow the sun’ matching engine model to a centralised liquidity pool, with major G10 spot pairs being matched in New York and Scandis, emerging markets and NDFs in London.

More than 35 clients – including regional and global banks, as well as non-bank market-makers – are currently taking part in an early access production environment on CME Globex for non-core currencies.

With both its listed FX futures and over-the-counter spot businesses operating on the same technology, CME hopes this will simplify access to both markets and boost participation