Shell invests in on-line foreign exchange

29-Nov-2000

Shell Internet Works BV (Shell) today announced an US$11.5m equity investment in Currenex Inc, the first independent, multi-bank, internet-based foreign exchange service, established in late 1999. The investment is part of the second round funding in Currenex. Shell will actively support Currenex?s further development through membership of its Advisory Board and the Royal Dutch/Shell Group Treasury has already begun to make use of the on-line service provided to Currenex. Currenex has attracted more than 25 global market-making banks and more than a dozen actively trading corporates and fund managers on both sides of the Atlantic since going live in April 2000. It operates on a ?per transaction? processing fee for trades executed through the service, plus a small monthly membership fee, rather than on the traditional percentage of transaction value charge. Foreign exchange [FX] markets are significant for the Shell Group, which transacts over US$200 billion each year. Through participation in on-line FX trading, Shell will benefit from dealing and settlement efficiencies, leading to direct cost savings. In addition, its investment in Currenex provides an opportunity for Shell to extend its use of the on-line FX services beyond its own direct Treasury needs and into new, value-adding services for its growing base of Business to Business (B2B) internet customers. Joris Kniep, Shell?s Central Treasury Manager said: ?Internet-based FX is still in the relatively early stages of development in a commodity market that is ideally suited to on-line service provision. When backed by the appropriate technology, the internet allows location-independent, real-time transactions for a range of currencies and values, with a variety of banks. The web simplifies the interface between back-end systems and facilitates full integration of business processes across financial markets. ?Several banks, consortia and independents have announced plans for electronic FX trading platforms and some are on-line to a limited extent. We will maintain a close watch on, and review, all these developments so that we continue to provide world-class treasury services. ?At present, Currenex is the only fully operational, independent, internet-based on-line foreign currency exchange. It has customers and banks trading daily through its FX trades web service. At the same time, it is already developing interfaces to mid and back-office treasury systems, adding analytical tools and decision support to further its value-added position in the market.? Tim Morrison, Executive Vice President of Shell Internet Works, responsible for the investment in Currenex said: ?The potential - through participation in Currenex - to align our Treasury and B2B marketplace needs, knowledge and experience to the continuing development of the business gives our investment added value.? Currenex went live in April 2000 with a fully operational web-based, secure, scalable system that has already exchanged billions of dollars.

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