Cboe FX to Cut Hold Times – Twice
Posted by Colin Lambert. Last updated: January 16, 2025
Three years after it halved its order review time (ORT) to 35ms, Cboe FX is again cutting what is effectively the hold time for liquidity providers on its platforms.
In a note to clients, Cboe says there will be two cuts to the ORT in 2025, the first with effect from 1 April from 35ms to 20ms, and the second on 1 October 2025, when it will be trimmed to 10ms. The changes will be applicable to both the spot and NDF (SEF) platforms operated by the firm.
Additionally, Cboe FX is extending its requirement for market makers on its platforms to have a signed Statement of Commitment to the FX Global Code to Cboe SEF. This means that unlike before, from 1 April, all market makers will have to be Code-compliant to price to both the sweepable ECN and Full Amount venues on the SEF.
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We have written before about asymmetric hold times on platforms, sometimes they have been egregious to the tune of hundreds of milliseconds, this move ensures that consumers on Cboe FX platforms will not suffer the extremes of what remains in my eyes, poor practice.
It also makes perfect sense to further cut hold times given how quickly the majority of LPs can conduct a last look check and should not impair their business at all. Even in October, after all, it will still largely be two updates on a primary venue before the check has to be completed. There will be certain LPs in certain jurisdictions, in certain currency pairs that may not hit this barrier, but for the vast majority of players on Cboe FX, this still leaves ample time. At the very least, this move should expose those LPs that are playing around with asymmetric hold times.
It is probably also a smart decision to announce the second cut now. When platforms first started announcing requirements to be Code-compliant and started reducing hold times, there was something of a leap-frog race taking place, with platforms trying to outdo each other. By announcing that the second cut comes into force in October, Cboe is probably taking that out of the equation. This is more about optics than anything else, but there is a sense that 2025 could be a year when liquidity consumers finally pay more attention to what was previously a largely-ignored stat in their execution data, reject rates.
Platforms could find themselves competing on their ratio of fill rates to hold times – after all, even the blithest of customers should understand that a high fill rate in shorter time is a better environment!
