PDS to expand, diversify forex offerings

The Philippine Dealing System Holdings Corp. is working to introduce onshore trading of the Chinese renminbi (in photo), along with euro, as part of plans to diversify its foreign exchange offerings. AFP PHOTO

MANILA, Philippines—The Philippine Dealing System Holdings Corp. (PDS) is working to introduce onshore trading of the Chinese renminbi and euro as part of plans to diversify its foreign exchange offerings.

“Further product expansion will be brought to the FX (foreign exchange) community,” PDS president Vicente Castillo said during the PDS Annual Awards Thursday night.

Castillo said the PDS was working on opening the local trading and settlement system for two new currencies. He did not disclose which new currencies will be introduced to the local FX market, but informed banking sources said he was referring to the renminbi and euro.

The FX trading system of the PDS currently allows trading and settlement on only one foreign currency, the US dollar. In 2012, the total value of US dollars transacted on the PDS Funds Transfer system amounted to $196 billion while dollar clearing at its PvP—Payment versus Payment electronic system—totaled $797 billion.

But with China now the world’s second-largest economy, the renminbi is seen to become a more accepted international currency, which is why PDS has been pushing for sometime to open up the local FX platform to it, banking sources said. PDS also sees a similar opportunity in trading euros.

At present, banks in need of other foreign currencies like the renminbi and euro can trade with foreign counter-parties on the offshore market.  Some treasurers said the PDS had been pushing for the introduction of new foreign currencies onshore but they are unsure whether the demand is sufficient to support onshore trading of these currencies at this time.

During the awards night, Castillo said the power of PDS’ alliance with Thomson Reuters would bring new platforms and markets to the local trading community, allowing “diversified capabilities for transactional access and more sophisticated products in the pipeline.”

“Product diversification in clearing will join suit with solutions for bilateral netting and counterparty clearing under exploration and a world-class surveillance system for heightened customer care and market integrity,” Castillo said.

Castillo said that PDSConnect, a new marketplace connectivity solution, offers high bandwidth, borderless market reach, unlimited access nationwide as well as faster and wider market access and content distribution.

He reported that 2012 trading volume breached the P5 trillion, up by more than 20 percent from the previous year.