Minex Waives Terminal Fee; Telerate Taps Meshell To Sell It

Minex has postponed indefinitely its plans to bill customers on a per-terminal basis. The electronic foreign exchange order-matching service -- which has been struggling to attract users since it went live in April (TST, May 3) -- will, however, continue to charge per trade. The news is particularly encouraging for Telerate, which markets Minex outside of Japan, and for Gary Meshell who has just been hired to lead those efforts.

Minex's decision to waive the per-terminal fee indefinitely follows Reuters' move to extend its Dealing 2000-2 incentive program until September (TST, July 26). Minex had been waiving the per-terminal charges since its launch as part of a "promotional pricing structure," says Telerate executive vice president Julian Childs. The latest decision appears to make that pricing structure more of an official policy -- despite the fact that Childs emphasizes that the per-terminal charge remains part of the "official" fee structure.

Both Minex and Reuters appear to be battening down the hatches ahead of the Sept. 15 launch of the third foreign exchange order-matching system, the Electronic Broking Service (TST, May 17).

Minex Corp. -- a consortium of Japanese banks, Tokyo Forex and Japanese telecommunications company Kyodo Denshin Denwa -- initially planned to charge $6,000 a month per terminal, in addition to the $25 per-trade fee. But Telerate, which owns a five percent stake in Minex, ran into considerable opposition to the stiff terminal charge, sources say. "Obviously, some customers told us that it is high," says Childs.

Sources say, however, that the Japanese shareholders were reluctant to alter the fee structure.

"Obviously, they would prefer that we charge that amount of money," Childs says, but "both Minex and Telerate agree that we should continue the transaction fee [promotional pricing structure] for the foreseeable future and build liquidity that way."

As a result, Minex has agreed to waive the per-terminal fee for "a decent time span," and stick to the per-trade charge, which is more similar to a traditional broker's pricing structure, says Childs. If the more modest fee structure helps build liquidity, Minex may decide to keep it in place, he adds.

Reuters, which launched its foreign exchange order- matching service over a year ago, just reported that volume had reached about 1,000 trades a day on average. Minex doesn't reveal how many trades get done via its system.

Although Telerate won the battle to waive the per-terminal charge, it still faces tough competition. Reuters has been able to use its far-flung network of over 10,000 Dealing 2000-1 terminals to its advantage. In an effort to build liquidity on 2000-2, it has offered a rebate against 2000-1 fees since January.

EBS hasn't announced its pricing structure yet, but it also has a distinct advantage: its shareholders are some of the largest foreign exchange players in the market.

The hiring of Meshell represents Telerate's first concrete move to account for the areas of responsibility that once fell to Scott Rumbold, who left his post as vice president of transactional products earlier this year (TST, May 17). In addition to marketing dealing systems, Rumbold oversaw sales and marketing of trading room platforms -- what is now known as Telerate Trading Room Systems (TTRS).

However, much of the latter responsibility had been distributed among Telerate's regional sales heads, who report directly to executive vice president Henry Becher and had only dotted-line responsibility to Rumbold. Childs says Telerate is currently "undecided" as to how -- or whether -- it will attempt to put another person in place to fulfill Rumbold's former oversight of TTRS.

The arrival of Meshell on the Telerate scene -- where his title is vice president for Minex and transactional services -- is surprising given the fact that only two months ago he took a similar post with software vendor Leading Market Technologies Inc. But sources say that Meshell had agreed in advance with LMT that he would be likely to leave if the vendor's corporate structure underwent a change.

These sources say that such a change became increasingly likely soon after Meshell arrived at LMT. One speculates that the change in structure may have to do with LMT's sibling company, software vendor DSP Development Corp. -- which markets software similar to LMT's Expo graphical spreadsheet to the scientific community.

Meshell has found himself buffetted by the winds of change more than once this year. Prior to taking his post with LMT, he left a highly visible position selling Lotus Development Corp.'s Realtime product to the Wall Street market. However, Lotus abandoned the sales, marketing and development efforts supporting Realtime this spring, leaving Meshell in a difficult position (TST, July 12).

At Telerate, sources say, Meshell intends to focus on increasing Minex's liquidity. They say he has set a particular goal of signing up three key market-makers in New York -- for the dollar, the yen and the Deutsche mark.

Childs says that Telerate is "obviously" interested in adding as many market-makers as possible in as many of its trading centers as possible. He says there is no specific New York target, however.