In another significant step for BOJ’s ongoing reform of the FX market, the promised and long-awaited electronic FX Trading Platform (FXTP) is almost here.
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2. The FX trading platform will facilitate real-time electronic FX trading and observation of trades between all authorized FX traders - namely Deposit-Taking Institutions (DTI’s), and cambios, using USD/JMD currencies.

3. For increased transparency, a select list of large corporate clients involved in buying and selling FX has been provided by the relevant umbrella organizations (PSOJ, JMEA, SBA, MSME Alliance, and the JCC) to be added to the system as observers.

4. While they will be unable to take part, these corporate observers will be able to see all daily trades in real-time, which will help them make informed decisions when approaching the market to buy or sell foreign exchange.

5. The intended implementation of the platform this year has been slightly delayed by 2 things - the systemic impact and distraction of COVID-19, plus the need to fine-tune the system to accommodate specific internal compliance requirements of DTI’s.

6. These internal requirements include limits on exactly how much FX DTI's can trade with non –DTI’s, so to facilitate seamless trading when the system is implemented, protocols will be built into the system for each cambio that a DTI may trade with.

7. To make productive use of the delay period, BOJ will, on 01 June 2020, introduce a PILOT stage of the FXTP, where DTI’s alone will be able to trade, while cambios will be able to familiarise themselves with the system as observers.

8. After the pilot phase, the actual platform, including ALL authorized FX traders (DTI’s and cambios), will be introduced gradually, in the following order, in three phases:

9. a) Order Market Trading – the pilot will mimic activities in this first phase. At this stage, what will happen is that FX traders will post sell (offers) and buy (bids) requests on the platform and conduct trades anonymously online.

10 b) Quote Market Trading – in addition to what happens in the order market, FX traders at this second stage will be able to contact each other directly within the FXTP to negotiate and settle on a bilateral basis.

11. c) External Market Reporting – in addition to what can transpire in the first two phases, this is the stage where all FX traders will report to BOJ all trades with large corporate clients as well as trades in other currencies outside the USD/JMD mix.

12. With the implementation of this third phase, the FXTP will effectively replace BOJ’s longstanding eGate® system, which is currently being used for reporting all daily transactions in the FX market.

13. Phases one and two should be introduced before the end of 2020, while the final component, phase three, should be introduced in early 2021.

14. The FXTP is the latest feature in the radical, but relatively smooth process of BOJ-led FX market reform, which has so far been highlighted by the 2-part introduction (‘sell-side’ then ‘buy-side’) of B-FXITT in late 2017/early 2018.

15. B-FXITT has revolutionized and modernized the way in which BOJ trades with authorized FX dealers and created much greater transparency in the FX market.

16. B-FXITT was followed in July 2019 by the signing of the Bank of International Settlements (BIS) FX Global Code, which adds credibility and holds those dealers to a global standard of integrity, efficiency, and good customer service.

17. The FXTP is expected to further upgrade the FX market by adding even greater layers of efficiency and transparency.

18. Thank you for your attention...