News Release

HSBC Participates in Multi-Dealer Foreign Exchange Service

6 June 2000

Seven of the world's leading financial institutions today announced the creation of FXall.com, which will offer clients low cost one-stop electronic access to a range of services in foreign exchange (FX), from execution to research. The founding participants are Bank of America, Credit Suisse First Boston, Goldman Sachs, HSBC, J.P. Morgan, Morgan Stanley Dean Witter and UBS Warburg.

FXall.com will offer 24-hour access to the global FX market, the world's largest financial market with $1.4 trillion in transactions daily. Through the use of leading-edge technology, FXall.com will create a platform where clients can easily access liquidity across a wide range of FX products. In addition, by establishing industry-leading back office protocols, FXall.com will allow clients for the first time to achieve the full cost efficiencies of straight-through processing (STP).

Paul Kimball, chairman of FXall.com and co-head of FX at Morgan Stanley Dean Witter, said: The efficiencies provided to clients by FXall.com will enable faster and cheaper FX transactions, resulting in an even greater degree of liquidity and transparency across this global market. We believe that FXall.com will be the most powerful application yet of e-commerce to the FX industry worldwide.

The international FX market is an over-the-counter (OTC) market, and clients trade with their dealers directly as principal in each transaction. FXall.com will automate the process, so that clients will have a single point of access to all participating dealers with whom they have a business relationship. The clients will thus be able to trade with participating dealers, as well as see prices, research and other market information of participating dealers. The dealers will have direct online access to their clients but will not access the system to trade with other dealers or to view research.

• FXall.com will offer clients of the participating dealers:
  
• The ability to see and trade on live FX prices supplied simultaneously by participating dealers.
  
• One-stop liquidity in FX spot, forwards and options.
  
• FX research and forecasts from participating firms.
  
• On-line order entry, routing and monitoring.
  
• The efficiencies of straight-through processing (STP).
  
• http://teamsite.household.com/iw-cc/command/iw.group.formspub.save_valid_form
  Delivery of a technology platform that is both cost-effective and secure.

FXall.com aims to be as inclusive as possible. Other dealers will be offered an opportunity to take an initial ownership stake in FXall.com, while participation is open to all FX dealers. A broad-based client advisory board will be formed to provide ongoing feedback on user issues.

"We intend for FXall.com to set the standard for service and efficiency in the global FX market, Kimball said, and we will be delighted to welcome additional global financial institutions as we move forward.

The venture will be independently staffed and managed to ensure an effective and timely rollout by year-end. In this regard, Philip Weisberg of LabMorgan, J.P. Morgan's e-finance unit, has been appointed interim CEO.

 

FXall.com

Frequently Asked Questions

June 6, 2000

 

I. Objectives

1. What is the reason for creating this multi-dealer foreign exchange (FX) system?

Answer: FXall.com will provide a secure e-commerce solution for the largest financial market in the world. It is our response to requests by clients for such a platform.

2. How will FXall.com work?

Answer: The international FX market is an over-the-counter (OTC) market, and clients trade with their dealers directly as principal in each transaction. FXall.com will strive to streamline the client to dealer interface and provide clients with a single electronic point of access to all participating dealers with whom they have a business relationship. The clients will be able to trade with their participating dealers, as well as view prices, research and other market information. The dealers will have direct online access to their clients but will not access the system to trade with other dealers or view their research.

3. When does FXall.com go live?

Answer: We anticipate a phased rollout with first deliverables by year-end.

 

II. Clients

4. What benefits will clients using FXall.com receive?

Answer: The benefits to clients are many. First, clients will benefit from straight through processing and associated cost savings. Second, they will be able to view and trade on live FX rates supplied by their participating dealers in a single location across a variety of FX products 24 hours a day. Third, FXall.com will give clients an on-line order entry system that allows them to route and monitor their orders. And finally, clients will be able to view foreign exchange research and forecasts from their participating dealers.

5. What will it cost clients to deal over FXall.com?

Answer: FXall.com aims to be the low cost provider of electronic FX service. It is anticipated that savings realized by reduced spreads and decreased processing costs should more than offset any usage fees that may be charged.

6. Which clients will have access to FXall.com?

Answer: It is our intention to make FXall.com available to multinational corporations, institutional investors, and other wholesale users of foreign exchange products and services.

7. How will FXall.com ensure that the system meets clients' changing needs?

Answer: FXall.com believes client involvement is the key to capturing market efficiencies and providing superior service in meeting and anticipating client needs. The Board of FXall.com will choose a globally based client advisory council to assist FXall.com in achieving its goals.

8. Will FXall.com maintain confidentiality?

Answer: Confidentiality is of paramount importance. FXall.com will not allow individual private client information to be circulated among dealers, to clients or to third parties.

 

III. Dealers

9. How were the founding partners of FXall.com selected?

Answer: These institutions are leading international FX dealers and have recognized the need to develop a new trading platform to be able to provide e-commerce efficiencies to their clients, without compromising competition that leads to market pricing. Each institution has significant market presence, a strong capital base, product breadth and exceptional global reach. Importantly, each also has the capability and determination to make this a highly successful e-commerce portal for clients 24 hours a day.

10. Will additional financial institutions be able to join the system?

Answer: FXall.com is an inclusive, not an exclusive, system. An expanded group of foreign exchange dealers will be offered an opportunity to take an equity stake in the system and other dealers will be able to participate as non-equity members.

11. How will the dealer participants in FXall.com benefit?

Answer: The key financial benefit to dealer participants will come from cost savings and efficiencies in execution and trade processing, as well as by offering enhanced services to clients.

 

IV. The Organization

12. How will FXall.com be staffed?

Answer: Building the premier online site for foreign exchange requires a team of highly talented individuals. We intend to announce shortly a management team that we believe has the leadership, energy, and abilities to accomplish this goal. We will be actively recruiting top professionals with a diversity of skills and backgrounds for a variety of positions.

In this regard, Philip Weisberg of LabMorgan, J.P. Morgan's e-finance unit, has been appointed interim CEO.

13. What is the relationship of FXall.com to the dealer-owners?

Answer: Although the Board will be comprised of leading market dealers, FXall.com will operate as a separate legal entity with an independent management team.

 

V. Technology

14. What security and stability provisions are built into the system?

Answer: FXall.com will employ state-of-the-art Internet security and stability features that will provide a high degree of protection to clients and participating dealers.

15. Will FXall.com have technology partners?

Answer: The founding partners have defined the business model for delivering FX in the e-commerce environment. It is the intention of the partners to make technology choices based upon the best combination of client needs and total functionality.