Euronext, the pan-European stock exchange, has made a move into the world of currency trading with the acquisition of FastMatch.
Euronext paid an initial $153m (£117.95m) for a 90 per cent stake in the business, which operates an electronic communication network platform for foreign exchange trading.
The move is a new step in Euronext's diversification strategy, with a launch of real-time market data feeds and a move into non-deliverable forwards “hot on the agenda” according to chief executive of Euronext London Lee Hodgkinson.
“The G20 response post-credit crisis has created a regulatory drive for over-the counter trading towards transparent, neutral and centrally cleared markets,” he said. “We see FX trading as being part of that whole diaspora of change.”
In the $5.1 trillion daily foreign exchange market, electronic trading has risen from 55 per cent in 2010 to 66 per cent in 2016.
Established in 2012 by Credit Suisse and online forex trading broker FXCM, FastMatch saw an average volume of $17.7bn traded on its platform in the first quarter of this year. This increased to $19bn in April.
“FastMatch is a disruptive player in the FX business,” said Hodgkinson. “They have unrivalled technology and are demonstrating a rapid growth penetration in that part of the industry.”
Euronext is due to pay an additional $10m to the business's former owners on the achievement of certain financial goals, while the management will hold on to a 10 per cent minority stake. Last year, the business generated $2.4m in underlying earnings.