In an effort to cut its overhead and provide electronic straight-through processing (STP) for its clients, MatchbookFXan Internet-driven foreign exchange (FX) matching system covering spot currencieshas incorporated Shadow Financial Services clearance and settlement software into its system. Separately, the company expects to expand its product coverage and is seriously evaluating whether it should issue an initial public offering of its stock.
Launched in July 1999, MatchbookFX currently has roughly 27 clients, including hedge funds, small to mid-sized banks and retail FX traders.
Mark Smith, CEO of MatchbookFX, says the company signed a licensing agreement with Shadow Financial in late 1999, after evaluating clearing and settlement systems from Automatic Data Processing, Refco and two or three other back-office vendors. Shadow, he says, provided a world class back-end system that could be easily interfaced with MatchbookFXs matching engine and front-end technology.
In addition to spot currencies says Smith, Shadow will provide clearance and settlement for other MatchbookFX products in the future. The firm plans to add coverage of forwards, swaps and exotic FX instruments to its portfolio by the end of the second quarter. Smith adds that, if the price is right, we can expect MatchbookFX to issue an IPO within six to nine months.