HOME >

FX Clearing


The FX market, or forex market, is the foreign exchange market. This is the market through which all of the currencies in the world are traded. The forex market is the most liquid and the largest financial market in the world in terms of the total cash value traded. An average of nearly $2 trillion per day is traded on the forex market through the major financial centres: New York, Tokyo, Frankfurt, Zurich, London, Sydney, Paris, and Singapore.

Now, when it comes to the forex market, there is no central marketplace. All trade is conducted over the counter 24 hours a day, seven days a week. This makes the process of clearing especially important for those who conduct business on the forex market.

Clearing takes place when an organization, which may be a specialized firm or a corporation acting as a third party, plays the role of an intermediary while assuming the role of both buyer and seller for transactions in order to objectively reconcile trade orders between transacting parties. Clearing is needed in the market place so that all buy and sell orders can be correctly and smoothly matched up. Clearing enables more efficient markets by having parties make monetary transfers to the clearing corporation instead of to each individual party with whom they've transacted. This helps mitigate any conflicts of interest and can allow cooler heads to prevail and find a workable solution quickly in the event of a misunderstanding or a disagreement about the terms of the deal which were agreed upon.

Therefore, a forex clearing house should comprise professional broker-dealers, market analysts, and money managers who are employed to the singular end of creating a seamless, convenient business environment for those who deal with them. A chosen clearing house should not compete with or against customer orders so that conflicts of interest will be essentially non-existent. The professionals who are employed at the firm should have wide experience in and mature understanding of the capital markets and the inner workings of foreign exchange trades.

The ideal clearing house would also offer back office systems with state-of-the-art technology, and should be able to deal with its clients on a bespoke basis while facilitating the wealth-generating efforts of those who deal through them.

Customers' orders should be treated with complete discretion without any marketing against principal or agency books or to outside intermediaries. Processing needs to be straight-through with real-time routed orders which get to the forex markets instantaneously. Simplicity of transactional records, updates, and market reports should also be enabled.



<< back
EXECUTION

The Kyte Group Limited was founded by David Kyte in 1985 on LIFFE, the embryonic futures exchange in the heart of the City of London.
READ MORE

Kyte's customers are market professionals, either sole traders, teams of market,
READ MORE

Providing clearing and settlement services to professional traders who transact business on the world's leading exchanges.
READ MORE