Euronext buys into currency trading with acquisition of FastMatch

Lucy White
Euronext Fastmatch FXCM
Euronext has acquired FastMatch, diversifying into foreign exchange (Source: Getty)

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.

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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.

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