Day: 15 May 2017

Why Have FastMatch Volumes Spiked?

There have been some raised eyebrows in the FX industry recently amongst those that have noticed FastMatch’s sudden spike in volumes.

Profit & Loss has previously noted FastMatch’s strong start to the year in terms of average daily volumes (ADV), highlighting that in March it reported an ADV of $19.2 billion for the month, a new record high and almost double the $10.1 billion ADV it registered in March 2016.

Then in April it set another high water mark in ADV terms, eclipsing March’s record with ADV of $19.8 billion in April, up 83.3% from April 2016.

Stevens Tapped to Head Sales at Tanridge Capital

Lee Stevens has joined Tanridge Captial in London as managing director and head of sales.

Tanridge is a global macro advisory and investment management company that specialises in FX.

Prior to joining Tanridge, Stevens was a director at Tullett Prebon, where he was the head of FX options for the global currencies team and before that, he was on the FX sales desk at Morgan Stanley focusing on macro hedge funds.

“I am optimistic about the growth prospects within the fund.

Former Fund Manager Nominated for CFTC Role

Brian Quintenz has been nominated to be a Commissioner at the Commodity Futures Trading Commission (CFTC), according to a White House press release.

Quintenz was the founder, managing principal, and CIO of Saeculum Capital Management from November 2013 to November 2016.

Before holding that position, he was a consultant with Rose International from June 2013 until November 2013. Prior to this, he worked at Hill-Townsend Capital from 2009 to 2012, first as an analyst and then as the senior associate.

CLS Data Shows Dip in FX Volumes

The average daily volume (ADV) submitted to CLS in April was $1.52 trillion, down 5% from the ADV of $1.6 trillion that it reported in March.

The ADV of spot FX trades submitted to CLS was $435 billion in April 2017, down 5.8% month-on-month and down 8% year-on-year.

The ADV of swaps trades submitted to CLS was $988 billion in April, down 4.9% from the previous month, but up 1.2% compared to April 2016.

Similarly, the ADV of forwards trades submitted to CLS was down month-on-month, but up year-on-year. CLS reported an ADV of $93 billion for forwards products in April, down 2.1% from March, but up 24% compared to April 2016.

Pragma Extends Algo Offering to NDFs

Pragma Securities has expanded its algorithmic trading platform, Pragma360, to include NDF products.

While the latest Bank for International Settlements (BIS) survey in 2016 showed that spot FX trading was down 19% compared to three years previous, it also showed that the NDF market grew by 5.3% over the same time period.

The growth of the NDF market, as well as the fact that these products increasingly trade electronically, is what prompted Pragma to start offering algorithmic tools for trading them, Curtis Pfeiffer, chief business officer at Pragma, tells Profit & Loss.

Nex Group Reports Revenue Growth

Following the disposal of Icap Global Broking to Tullett Prebon, the re-branded Nex Group has reported an increase in revenue for the financial year 2017, which ended on March 31.
Nex says revenue from continuing operations was GBP 543 million in the year to March 2017, up from GBP 460 million for the year to March 2016, an 18% increase.
Trading operating profit was GBP 145 million (GBP 139 million in FY 2015-16), while trading profit before tax was GBP 114 million (110 million) and profit before tax was GBP 120 million (27 million).

And Finally…

The FX TCA analysis from LMAX Exchange should be welcomed for highlighting the absence of price improvement in too many TCA calculations, but there is still more work to be done and ground to be covered before the industry truly has a genuine TCA metric. What about market impact relating to the “parent” order? Do we differentiate between rejections for predatory traders and hedgers? After all, as any divorcee, if they are honest, will probably tell you, both parties play a role in the break up.

LMAX Exchange Challenges Conventional Wisdom on TCA

A new white paper released today by LMAX Exchange seeks to offer more in-depth analysis of the cost of trading in FX markets and calls for the creation of “robust, commonly-agreed” transaction cost analysis (TCA) metrics that compare and contrast the differences between executing on firm and last look liquidity.
The paper, TCA and Fair Execution: The Metrics that the FX Industry Must Use, proposes a blueprint for clients to better discern and compare the costs of trading across firm and last look venues and argues that existing TCA metrics fail to capture the nuances and value of firm liquidity.

FINRA Seeks to Strengthen Penalties on Repeat Offenders

The Financial Industry Regulatory Authority’s (FINRA) board of governors has approved the next step in what it terms its ongoing initiative to strengthen controls on brokers with a history of significant past misconduct.
The recommended changes also seek to ensure greater accountability for firms that choose to employ high-risk brokers.
FINRA says it plans to issue a Regulatory Notice seeking comment on the key proposals – which would strengthen protections for investors and range from additional disclosure on its BrokerCheck platform to heightened supervision of brokers appealing disciplinary matters.

TraderTools Reports Volume Growth

Although it does not provide specific numbers, TraderTools says that Q1 2017 volumes across its Unique Liquidity Network (ULN) were 217% above Q4 2016 volumes.
It adds that the ULN now consists of over 25 “unique” liquidity providers, making prices in emerging and “under-served” market currencies such as Turkish lira, South African rand, Russian ruble, Israeli shekel, the CE-3 currencies, and the Scandinavian currencies.
The number of “unique” takers connected to the ULN increased in Q1 by more than 20%, the firm also states.