BGC Names 10 Firms Backing FMX Platform

BGC Group has named 10 banks and market makers who have taken a minority stake in its FMX platform, a trading venue for US Treasuries, spot FX, and US interest rate futures, which is widely seen as a challenger to CME Group’s dominance in the futures space.

Bank of America, Barclays, Citadel Securities, Citi, Goldman Sachs, J.P. Morgan, Jump Trading Group, Morgan Stanley, Tower Research Capital, and Wells Fargo have been named as minority equity owners of FMX, a move BGC says provides the concern with a post-money equity valuation of $667 million. FMX will leverage BGC’s low-latency trading infrastructure and global distribution to further support liquidity in the interest rate futures market.

FMX Futures received CFTC approval in January, and is expected to launch in September 2024. BGC says FMX’s cash US Treasury platform, FMX UST (formerly known as Fenics UST), has grown its Central Limit Order Book market share each sequential quarter, ending the first quarter 2024 at 28%, up from 26% in the fourth quarter of 2023, according to Coalition Greenwich data.

“We have brought together 10 of the most important global investment banks and market making firms to create a premier trading venue for the interest rate markets,” claims Howard Lutnick, chairman and CEO of BGC Group and chairman of FMX. “We offered ownership to this incredible investment group knowing the enormous value they bring to FMX, which will benefit all market participants.”

Lou Scotto, CEO of FMX, adds, “With support from these leading financial firms, we believe FMX will become a rapidly growing futures platform and create important efficiencies for our shared clients. With our clearing partner, LCH, the largest clearer of interest rate swaps in the world, clients will receive significant portfolio-margining capabilities, creating competitive advantages across US interest rate markets.”

The launch received predictable backing from the new investors. “FMX’s unique protocols provide a fresh competitive edge across rates, FX, and futures markets,” said Geoff Weber, head of G10 Rates flow trading at Citi. “The impressive growth in market share that FMX has experienced recently enhances market liquidity and positions FMX as a potential catalyst for increased competition, particularly within the futures market. This innovation not only promises to elevate market dynamics but also aims to lower costs for all market participants, signalling a forward-looking shift.”

Kristen Macleod, head of Americas macro distribution and co-head of global FX distribution at Barclays, adds, “FMX is going to drive innovation and competition across the rates, FX and futures markets. As a key investor, Barclays looks forward to delivering the benefits of our investment to our clients through improved execution and competitive fees.”