OneChronos has launched a spot foreign exchange (FX) trading venue that applies an auction-based market design to a market traditionally dominated by continuous trading and bilateral relationships. In an interview with Traders Magazine, Blaise Sheppard, Head of FX at OneChronos, discussed how the company’s optimization-based auction model works in FX, how multi-pair matching can support portfolio-driven trading strategies, and how market design may influence liquidity behavior.

Which participants will be providing liquidity at launch, and how do you plan to scale participation in a fragmented FX market?

Initial participation includes a mix of banks, institutional liquidity providers, and buy-side firms through their bank execution providers that are already active in electronic FX markets. Importantly, the goal of OneChronos FX is to enable more and better interaction among the liquidity that already exists in the market without increasing fragmentation. FX has always been a diverse ecosystem of liquidity providers, and our view is that the key question is not simply who participates, but how those participants interact. Market design plays a major role here. When participants feel their trading intent is protected, particularly around concerns like information leakage and adverse selection, they are generally more comfortable showing size and pricing more aggressively. 

OneChronos operates as an all-to-all venue, but it is designed to complement existing trading relationships, particularly those between the buy side and banks. Banks remain central to the FX ecosystem, both as liquidity providers and as execution partners for their clients. Scaling participation ultimately comes down to solving real execution problems while making adoption straightforward. Our approach is to meet firms where they already operate, using standard order types, integrating with existing relationships, connectivity providers, and workflows.

We’ve seen in other asset classes that venue design can materially influence liquidity behavior. Our US equities ATS, which uses a similar auction-based model, has grown rapidly largely driven by execution performance.

We believe the same principle applies in FX: if participants see better execution outcomes, participation follows.

How does your auction model improve execution quality versus traditional ECNs?

Traditional ECNs typically operate on price-time priority, which places a large value on speed and encourages investment in latency-sensitive trading behavior. OneChronos uses frequent batch auctions that run multiple times per second, where each auction optimizes for best execution outcomes. Rather than matching orders sequentially, the auction considers the entire set of trading interests simultaneously, which allows the system to find better overall matches.

This structure helps reduce:

• Short-term price reversion
• Information leakage
• The need for speed-based strategies

The model is designed to shift the focus from speed competition to execution quality, aligning the matching process with the outcomes participants actually care about. Similar mechanisms, including that of our sister company that runs an equities ATS, have already demonstrated strong results in US equities, where periodic auctions have shown improvements in metrics that participants value most, such as quote stability and markouts.

Which trading strategies benefit most from multi-pair optimization?

Multi-pair optimization is particularly valuable for portfolio-driven FX trading strategies, where trades across several currency pairs are economically related. This often arises for asset managers and institutional investors whose base currency differs from the currency of the assets they trade. For example, imagine a Norwegian pension fund trading US equities. 

Ultimately, those investments need to be translated back into Norwegian krone (NOK). The most liquid NOK pair in the FX market may be EUR/NOK, but the exposure created by the equity trade might naturally be USD/NOK.

In that situation, the investor may be economically indifferent between:

• Executing USD/NOK directly, or
• Executing a combination such as EUR/USD and EUR/NOK, depending on which route produces the better overall outcome.

Traditional FX execution treats each currency pair independently. An optimization-based matching process can evaluate multiple execution paths simultaneously and select the one that produces the best overall outcome. Optimization can also identify trading opportunities that would otherwise be difficult to discover. For example, if a participant simply wants USD exposure but is indifferent to which currency it is against, the system can match that interest with liquidity across multiple currency pairs. Rather than traders probing multiple markets with small orders to find liquidity, the optimization engine can stitch those opportunities together directly, improving execution efficiency and expanding the set of possible trades.

As FX trading becomes more integrated with multi-asset portfolio management, tools that optimize across securities can help traders focus on the portfolio outcome rather than individual trades.

Can you quantify reductions in information leakage and signaling risk?

Information leakage in FX is notoriously difficult to measure directly because it often manifests as post-trade reversion or adverse price movements.

What we can measure are execution quality metrics such as:

• Short-term markouts
• Price stability following trades
• Fill consistency

In markets where auction-based mechanisms have been introduced, we have observed improvements in these metrics relative to continuous matching models. The primary driver is that auctions aggregate trading interest before matching, which reduces the signaling that often occurs when orders interact sequentially.

By batching orders together, participants receive less information about individual trading intent, helping mitigate signaling risk.

How does the venue integrate with existing FX workflows and prime brokers?

OneChronos FX was designed with a principle we often repeat internally: “the best auction is one people will actually use.”

Integration with existing workflows is therefore critical.

Participants can access the venue through:

• Existing FX sell side algorithms
• standard FIX connectivity
• common network and technology providers

Trades are centrally cleared to reduce operational complexity. Order types are standard. Our goal is to meet participants where they are, rather than forcing firms to change their trading workflows.

This also helps reduce operational friction for firms evaluating new venues.

Do you see multilateral auctions reshaping broader FX market structure?

The FX market has already undergone significant electronification and automation, and we believe the next phase of evolution will focus on market design and execution outcomes.

Many of the challenges in FX today relate to:

• fragmentation
• information leakage
• difficulty aggregating liquidity efficiently

Auction mechanisms represent one way to address these issues by creating environments where participants are more comfortable showing liquidity. Importantly, these mechanisms do not replace existing workflows like RFQ or streaming liquidity; they complement them.
We expect innovations like multilateral auctions to become another tool in the execution toolkit, alongside existing trading methods.