Day: 23 May 2018

MarketFactory Releases Pre-Trade Risk Solution

MarketFactory has released its new software product, Reflector, a pre-trade risk management service for banks, prime brokers and funds to help ensure trading limits are never broken.

The firm says that Reflector addresses the need for risk management software that eliminates installation for the client, works with any FIX API, and monitors and balances all limits and positions across all trading venues. Additionally, it checks all orders pre-trade with a latency impact under three microseconds 99.999% of the time and supports over 60 trading venues.

“Runaway algorithms or simply breaking a limit remain a major risk in an increasingly complex market,” says James Sinclair, executive chairman of MarketFactory. “We are very excited to see the positive impact that Reflector has for our customers. This includes both ensuring limits will be not be breached and allowing more efficient use of available credit.”

Could the Shift to Clearing Alter FX Market Structure?

Although there are clear drivers pushing more FX products into central clearing, this is unlikely to have a significant impact on market structure, says Paddy Boyle, the head of ForexClear, LCH.

“The pressure to clear for banks that are subject to bilateral initial margin rules is very, very high and we have banks who tell us they’ve been cut off by other banks because they weren’t clearing,” he says.

That, explains Boyle, is one of the negative drivers towards central clearing, while on the positive side there are lower capital costs, lower initial margin requirements and fewer credit line restrictions for firms that choose to use clearing services. As a result, Boyle predicts that cleared FX volumes will increase “pretty significantly” going forward.

Capitolis Launches FX Novation Service

Capitolis, the technology company founded by ex-Icap (now NEX Group) executive Gil Mandelzis, ex-Thomson Reuters CEO Tom Glocer and Igor Teleshevksy, formerly of Traiana, has launched a novation service in FX.
The firm says that Citi, HSBC, BlueCrest and Brevan Howard, among many other market participants, have collaborated with the firm on the service, which it adds is the first of its kind in FX.
Capitolis Novation automates the currently manual workflow in both FX prime broking and bilateral trading, thus providing capital efficiencies for the FX market.