CBOE to challenge Refinitiv and CME with central limit order book for FX

The foreign exchange (FX) trading arm of Cboe Global Markets is launching a new, all-to-all, central limit order book (CLOB) for the institutional FX market.

Cboe FX Central launches today and will offer trading in the most actively traded pairs in the spot FX market, including EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, USD/CHF and USD/CNH.

“We believe there is a unique opportunity to improve upon the two central limit order books that currently exist in the FX market,” said Bryan Harkins, Head of Markets at Cboe Global Markets, commenting on the launch. 

Cboe FX Central’s CLOB model rewards liquidity providers (LPs) with faster market data when their liquidity is at or close to the best bid or offer (BBO). Its market data will be available at three different speeds (real-time, three millisecond delay and 10 millisecond delay). The speed at which market data is delivered is determined by where the LP’s liquidity is relative to the Cboe FX Central BBO. 

“Cboe FX Central provides a more democratic model to accessing real-time data than the current primary markets where real-time data is provided to those that execute a certain monthly volume threshold, explains Jonathan Weinberg, Head of Cboe FX.

“Any market participant on Cboe FX Central, regardless of the size or volume of its trading activity, is able to earn faster market data on Cboe FX Central on an order-by-order basis.” 

The order matching mechanics of Cboe FX Central are consistent with other central limit order books in the FX market. All orders in the book are subject to a minimum quote life of 25 milliseconds and orders are executed on a price/time priority.