CBA provides indicative pricing in spot, forward and swap FX markets using internal and third party platforms. When a trade request is submitted in response to CBA’s indicative pricing CBA may accept or reject the request at its sole discretion based on a number of automated pre-trade controls. These pre-trade controls are known as “Last Look”.
Last Look is a standardised verification and protection mechanism for CBA’s electronic pricing to identify whether trade requests are made at prices within CBA’s tolerance for execution. This process can include credit, market volatility, liquidity and malformed order checks, as well as latency checks. Latency checks protect both the client and CBA against executing a trade in circumstances where the market price at the time of execution has moved outside pre-defined tolerances relative to the indicative price quoted by CBA at the time of the trade request by the client, and therefore trading at the indicative quoted price under such circumstances could lead to an undesirable outcome to either party. CBA does not pre-hedge or use any information gained in the Last Look window when market making and applies Last Look symmetrically. This means that trades may be rejected if the market price, when checked, has moved materially either in or against the client’s favour. Materiality is determined by reference to a number of factors relevant to the particular trade request, including but not limited to volatility, liquidity and the client’s trading history with CBA.