HSBC and Standard Chartered Bank are set to become direct opponents in a new battle for foreign exchange clients via the Internet.
Standard Chartered is one of 50 international banks to sign up for the largest Internet-based foreign exchange marketplace, launched in London this week.
The portal, known as Atriax, promises a highly liquid international marketplace where companies, investment funds and banking foreign exchange professionals can openly trade basic spot and forwards in more than 100 currencies, including most in Asia.
Chase Manhattan Bank, Citibank, and Deutsche Bank - three of the largest players in the foreign exchange market - are the major shareholders in Atriax.
The Asia-Pacific region is only marginally represented in the Atriax alliance with six Japanese banks, two banks from Australia, and Standard Chartered - which has a strong presence in the forex market in Singapore.
"Now that Atriax is public knowledge, we hope to sign up dozens of members quickly, and hopefully more from Asia," said Dan Morehead, chief executive designate of London-based Atriax.
"We are open to everyone, and hope to have HSBC as a member too."
But HSBC, Asia's largest bank, is already a founding member of FXall.com, an alliance of 13 banks including JP Morgan, Dresdner Kleinwort Benson and Goldman Sachs, and "does not intend" to join Atriax.
"We are very content to be part of FXall," said Rob Loewy, head of foreign exchange at HSBC in London. "The 13 banks [in FXall] represent a third of the global market's liquidity.
"Both FXall and Atriax are open platforms, so institutions can join both if they choose." However, analysts believe the sheer number and caliber of banks quoting prices on Atriax, which account for half of global currency trading, will attract a vast volume of trade over time.
"You have only got to compare 13 banks versus 50 to see where people will go," said a senior analyst at a United States bank aligned to Atriax.
Trading on FXall, a US-based portal, will go live in the first quarter of next year, three months before its British rival, which is not expected to begin until the second quarter.
The two systems are almost identical, offering corporate treasurers, money managers, hedge funds, central banks and other institutional clients a low cost one-stop forum for foreign exchange pricing, execution, and the latest research and analysis on the market.
Already testing the FX Internet market is Currenex, an independent multi-bank foreign exchange service.
Banks, it seems, have the choice of either skimming profits by allowing clients to see live FX prices supplied simultaneously by all participating dealers or being left out by competitors.
