Citicorp's Currency Trader: Small Order System For FX

Citicorp has found a way to relieve its foreign currency trading desk of the nuisance orders associated with corporate trade payments, while expanding its treasury management services.

Currency Trader, a co-development of Citicorp's investment and institutional banks, allows commercial banking customers to execute and receive online confirmation on forex transactions of up to $500,000. Users can name the beneficiary of the trade and transfer funds to specific accounts at the beneficiary's bank.

By some accounts, half a million bucks sounds like a lot of money, but to an interbank currency trader it's peanuts. Traders would rather not be distracted by such trivial sums.

Currency Trader collects and confirms orders all day long, pegging its exchange rates to interbank prices. At present, confirmed orders are manually reconciled with the investment bank's position on a periodic basis.

The rates listed by Currency Trader are close to those quoted by the interbank trading desk.A wafer-thin margin, which varies with the size of the transaction, is automatically added to the displayed prices.

Eventually, trades entered through Currency Trader will be combined automatically with the currency desk's position. Currency Trader is slated for integration with Global Trader's electronic book when that system's first New York location opens (see related article, this issue).

Offered through Citi Treasury Manager (CTM), the service is available without charge to Citibank commercial banking clients with a foreign exchange line of credit. Citi Treasury Manager is now part of Citicorp Information Business.

Currency Trader users can access the system's host (courtesy of the erstwhile Global Electronic Markets group) on a dial-up basis from any communicating personal computer. Following a basic menu-driven protocol, users can enter trades, monitor the prices of 18 major currencies, review a 45-day archive of transactions, or print transaction records.

Twenty companies are now using Currency Trader, executing anywhere from 10 to 30 trades per day. Available only to North American client companies, the service is now used primarily for the purchase of foreign currencies.

Currency Trader founders Eva Flaster, Sam Borenstein, and Mary Kyzyk are looking into the possibility of combining the trading capabilities of Currency Trader with other Citicorp information services. The system is already used by the private banking group to serve the foreign exchange trading needs of selected individual investors.