Day: March 6, 2019

Exchanges in FX: A Game of Musical Chairs

In recent years, large exchange groups have been lining up to buy OTC FX platforms. But in this game of musical chairs, what happens to the venues without a buyer when the music stops? Galen Stops reports.One of the major trends in the multi-dealer platform space in recent years has been the acquisition of these platforms by larger exchange groups. Hotspot was the first to go after it was bought by BATS Global Markets in 2015, which in turn was then acquired by Cboe Global Markets in 2017 and the FX platform was rebranded as CboeFX.

Currenex and FX Connect: An Aggressive Roadmap

2018 “began with a bang” for Currenex and FX Connect due to the implementation of MiFID II, according to David Newns, global head of Global Link Execution Services at State Street, which owns both platforms. He adds that a “not inconsiderable amount of blood, sweat and tears” went into ensuring that the two Multilateral Trading Facilities (MTFs) that it was required to launch were up and running ahead of the January 3 deadline, an experience that was shared by many market participants in Europe last year.

Flow Traders: Standing Out from the Crowd

Robbert Sijbrandij, head of FX at Flow Traders, talks to Galen Stops about why he thinks there’s still room for more non-bank liquidity providers in the FX market.Dutch proprietary trading firm, Flow Traders, has spent the past two years building out its FX business line. The firm trades in the region of €750- €800 billion of ETFs per year, of which roughly two-thirds has an FX angle, meaning that Flow Traders was already doing in the region of €2-3 billion of FX on a busy day before they decided to become a liquidity maker in FX.

Reducing Latency in FX: Necessary but a Challenge

For platforms looking to differentiate on the speed of their technology the equation is measured in the scale of the challenge rather than the opportunity. As David Mercer, CEO of LMAX Exchange observes, “You can’t differentiate on speed, but you have to keep in line with the best in the market – and that means cost.”
Liquidity providers have to be able to update their prices as quickly as possible, and likewise, trading venues have to deliver price updates to their customers as efficiently as they can, to facilitate a fair trading environment. “Five years ago market data was being delivered at 100 milliseconds, then more recently it was at 5 milliseconds,” notes Mercer. “At LMAX Exchange we are live streaming and cancel and replace of orders is measured in microseconds, but already people are talking about nanoseconds – and that’s a challenge for us.”

INTL FCStone Subsidiary to Expand Access to FX Platform

The Global Payments Division of INTL FCStone’s London based subsidiary, IFL, has announced plans to roll out its FXePrice platform to its entire network of counterparties.Launched in June 2018, FXePrice enables correspondent banks to feed local currency live prices electronically to IFL, allowing users to stream foreign exchange prices, which reduces latency and ensures efficiency by integrating with counterparties’ straight-through-processing (STP) systems.
he platform automates the manual process of FX price discovery in emerging markets and facilitates instant electronic price discovery via both streaming and request-for-quote (RFQ) functionality.

FX Trading on SEFs Dips in February

The average daily volume (ADV) of FX traded on Swap Execution Facilities (SEFs) in February was $56.2 billion, down 8.2% month-on-month and down 5% year-on-year.Tullett Prebon was the most used SEF for FX trading last month with an ADV of $17.5 billion. It was followed by BGC, Tradition and GFI, which recorded ADVs of $11.7 billion, $10 billion and $9.8 billion, respectively.After this, the ADV figures trail off rapidly, with NEX, TRSEF and Bloomberg recording $4 billion, $1.7 billion and $1.2 billion, respectively, and all of the other SEFs reporting an average of less than $150 million per day of FX trading on their platforms.

Currenex and FX Connect: An Aggressive Roadmap

2018 “began with a bang” for Currenex and FX Connect due to the implementation of MiFID II, according to David Newns, global head of Global Link Execution Services at State Street, which owns both platforms. He adds that a “not inconsiderable amount of blood, sweat and tears” went into ensuring that the two Multilateral Trading Facilities (MTFs) that it was required to launch were up and running ahead of the January 3 deadline, an experience that was shared by many market participants in Europe last year.

Exchanges in FX: A Game of Musical Chairs

In recent years, large exchange groups have been lining up to buy OTC FX platforms. But in this game of musical chairs, what happens to the venues without a buyer when the music stops? Galen Stops reports.One of the major trends in the multi-dealer platform space in recent years has been the acquisition of these platforms by larger exchange groups. Hotspot was the first to go after it was bought by BATS Global Markets in 2015, which in turn was then acquired by Cboe Global Markets in 2017 and the FX platform was rebranded as CboeFX.