ParFX platform adds Citi, JPMorgan to founders

LONDON, Feb 12 (Reuters) - JPMorgan and Citi have added their weight to ParFX, a currency trading platform launched by the market's major banking players to curb the advantage of high-frequency traders, the platform said on Wednesday.

The two U.S. banks bring to 14 the founding group of major institutions behind ParFX, also seen by sector participants as an initiative aimed at weakening the hold of incumbent EBS on G10 currency markets.

"The addition of Citi and JPMorgan further expands ParFX's global distribution network as the platform is opened to the wider FX trading community in early 2014," the company said in a statement.

Citi is the world's second largest currency trader and JPMorgan the sixth biggest, according to the last Euromoney poll.

The global market in foreign exchange was worth more than $5 trillion a day last year, but volumes of trading at some of its major providers, which also include Reuters parent company Thomson Reuters (Frankfurt: TOC.F - news) , have been falling steadily.

The fall is due largely to the rise of high-frequency computer-based traders, who have undermined the dominance of the major banks and the ease with which they are able to profit from the market.

ParFX features technology which levels the playing field between slower and faster clients. It is set to allow hedge funds, at heart of the high-frequency revolution, to join banks in its trade to increase liquidity.

The moves come at a time of broader flux for the $5 trillion-a-day global market. Moves by regulators have led to a consolidation of the large number of retail platforms in the United States and may prompt similar changes in Europe this year.

Regulators are also investigating allegations that traders at a number of major banks including Citibank and JPMorgan used information about client orders improperly to rig rates at the benchmark currency fixings run daily out of London.

"Citi believes a competitive marketplace, offering an array of products and services is in the best interest of our clients and the industry," Richard Bibbey, Global Head of Electronic FX Trading at Citi said in the statement about the ParFX deal. (Reporting by Patrick Graham; Editing by Catherine Evans)