NEX Optimisation will be launching its new NEX Infinity platform in July,
when its clients will be able to start testing spot FX and cash equities in the
Infinity distributed ledger.
In addition to its use of blockchain technology, the new architecture
also utilises cloud hosting in a bid to simplify trade processing, improve
clients’ control of their data and reduce costs. As a Software as a Service
(SaaS) platform, Nex Infinity will also allow third-party technology providers
to offer their services on the platform.
According to Jenny
Knott, CEO of Nex Optimisation, the reason behind starting with FX initially
was a result of needing to transform
Traiana’s technology – where the network is predominantly FX. “It tested our
hypothesis that distributed ledger was not the place to do things but it is the
right place to store things,” she says.
competitors are also looking at distributed ledger technology but only as
single asset solutions, Knott says, adding, “However, the buy side and the real
money clients find that using distributed ledger technology is only interesting
if it is cross asset. If you are solving a problem for the buy side then you
need to solve it for everything.”
So while Nex
Infinity will offer spot FX in the distributed ledger, Knott believes that of
all the instruments it is already about the most automated, efficient and
straight-through asset-class. “We can make improvements in pre-execution credit
checking or how you deliver that service to bring the cost down, but that’s not
transformative for FX,” she adds.
one of the reasons behind releasing with cash equities was that it is
foundational for total return swaps which is a “pretty broken part of the
financial services ecosystem”, according to Knott. She adds: “Getting cash
equities into the distributed ledger also demonstrates that we are cross-asset,
which is important.”
The timing of launch
however will be of most interest due to the upcoming trade reporting obligation
under MiFID II, due to begin on 1 January. This is what matters most to clients
at the moment, according to Knott, in addition to the recent introduction of
new margin rules.
“Even before we’ve
dealt with anything else in MiFIR, EMIR is changing and so our clients’ prime
brokers are no longer doing their delegated reporting,” she explains. “That’s
the problem they need solved now. Clients want a holistic view of margin and
the ability to optimise.”
At the same time, however,
Nex Optimisation is offering MiFID II as a core solution, according to David
Thompson, COO, Traiana and Nex Optimisation. “It demonstrates the
ability to manage cross-asset
and cross-instrument data flows,” he explains. “With the data flows on the
platform, the order in which additional services are rolled out will be
driven by the clients’ needs.”
currently handles more than 75% of FX prime broker flow for spot and the core
CFD network. “So those two networks can be migrated into the new infrastructure
technology without clients having to do anything significant on their side,”
The firm has also
changed the structure of the Nex Optimisation business, headlined by the
appointment of Andrés Choussy as head of trade and portfolio
Choussy joins the firm from JP Morgan where he led its derivatives
clearing business in the Americas and served as the JP Morgan board member for
Traiana. During his time with the bank he had also served as its global co-head
of OTC clearing, global head of FX prime brokerage and head of credit
derivatives clearing in the Americas.
In his new role he will be supported by Stephen Best, who has been
appointed head of FX solutions with Nex Optimisation. He moves across from Nex
Markets where he served as head of FX options for EBS.
Prior to joining the group, Best also held the role of CEO at FX Bridge
Institutional Services. Earlier positions included global head of electronic
trading and distribution for State Street Global Markets and as global head of
e-commerce strategy for JP Morgan’s global currencies and commodities group.
Trade and portfolio
management is one of NEX Optimisation’s five new “solution
pillars” which are powered by TriOptima, Traiana, Reset, Nex Data,
ENSO and Abide Financial.
As such, the additional four pillars will be led by: Guy Rowcliffe,
head of analytics; Collin Coleman, head of regulatory reporting; Stuart
Connolly, head of financial resource optimisation and Kevin Taylor, head of
“Nex Optimisation’s raison d’être
is to lead the transformation of market structure,” Knott explains. “In order
to do this, it was important for us to rethink how we service our clients.”
From July, the platform moves into production testing for FX and cash
equities matching, allocations and confirmations on the distributed ledger,
with the viability of the initial product having been established in March.
According to Nex, adoption of the new technology should require “minimal
effort” from clients who, on request, can be automatically migrated to the new
Further services will be introduced for production testing by autumn,
based on client demand, the firm says. These will include additional asset
classes and third-party connectivity provision.
Michael Spencer, CEO of Nex Group, adds: “Leveraging our significant
technology expertise and assets, Nex Infinity is truly transforming and
simplifying market infrastructure.”