Aston Capital Management has gone live in the LD4 Equinix data centre, conducting the first test trades on Thursday last week.
“At Aston Capital we’re constantly looking to develop new relationships and grow our distribution, and we found that a lot of our trading partners and customers in London, Scandinaiva and throughout Europe in general, wanted to do their trading through London in order to reduce their latency and therefore improve their trading efficiency,” Isaac Lieberman, CEO of Aston Capital, tells Profit & Loss.
In the past two years, Currenex, GTX, Hotspot and Thomson Reuters, have all launched additional matching engines in LD4, while FastMatch launched on there in 2013. Lieberman says that this trend of ECNs building out distinct and separate liquidity pools from the NY4 matching engines was also a factor in his decision to develop a presence in LD4.
“As this trend continues it builds momentum because as firms in Europe realise that they could get better execution efficiency and better response times by using these London matching engines, they’re going to want to seek out that liquidity.
“So as a non-bank liquidity provider, being able to bring this liquidity closer to the customers is a big value proposition for them and it’s one of the ways that we’re looking to grow our business,” he says.
The growing scrutiny over best execution for FX, driven by a combination of factors, including the availability of new transaction costs analysis (TCA) tools and new regulatory requirements under Mifid II, is also accelerating this trend, says Lieberman.
“There’s always been a high demand for execution efficiency, but the focus on achieving the best possible FX execution has recently become more acute. Something as simple as trading locally versus travelling to NY4 if you’re based in Britain, Scandinavia or Europe can improve execution and this is why there is a growing trend of distinct liquidity being created in the regional data centres,” he explains.