The average daily volume (ADV) of spot FX traded on Swap Execution Facilities (SEFs) in January was $61.2 billion, up month-on-month from $49.8 billion and up 5.5% from $58 billion in January 2018.This represents the third highest month of ADV ever, behind June and March 2018, when the platforms registered a total of $62.9 billion and $61.3 billion, respectively. Tullett Prebon’s SEF saw the most FX volume, with an ADV of $15.8 billion going through its platform last month. The next biggest by volume was the BGC SEF, which recorded an ADV of $12.4 billion in FX, followed by Tradition and GFI, which both recorded $9.4 billion.
Profit & Loss understands that Liam Hudson is joining BGC Partners to run its e-FX businesses, including Fenics FX, which was launched last year, MidFX and the electronic FX options offering.
Hudson was last at Bank of America Merrill Lynch in London where he was global head of e-FX for more than eight years.
Hudson joined BAML from Barclays, a firm he joined when it took over the FX business interests of Lehman Brothers. At Lehman, he spent seven years in the e-FX business, including helping develop the FXLive platform as well as the firm’s algo execution capabilities.
I was not surprised to hear that another two FX platform providers are working on the delivery of a mid-market matching, or ‘dark’ mechanism to add to their suite of services. Inevitably given the (apparent) success of BGC’s dark pool MidFX, this is an avenue that they should explore. Given that nothing is launched without extensive customer feedback, one has to assume this is client driven, but that begs the question. If customers like ‘dark’ trading, why has there been no serious challenge to BGC?
Fenics Market Data, the market data division of BGC Partners, and China Credit BGC Money Broking Company (CCT-BGC) have agreed to a distribution partnership, whereby Fenics Market Data will exclusively provide CCT-BGC’s Chinese market data products to clients.
Through this agreement, Fenics Market Data is becoming the sole international commercial agent for CCT-BGC’s onshore Chinese data, covering the fixed income, interest rate and FX markets.
CCT-BGC, established by China Credit Trust Co and BGC, is the first money-broking company granted a licence by the China Banking Regulatory Commission (CBRC) in Beijing.
Fenics Market Data, which is owned by brokerage firm BGC, has added two new members to its Americas team, both based in New York.
Damien Fitzpatrick joins BGC as head of sales, Fenics Market Data, for the Americas, reporting to Elliott Hann, Fenics Market Data’s director of sales.
Fitzpatrick joins from Icap, a subsidiary of TP Icap, where he was most recently head of sales and business development for Asia Pacific. Prior to that, he worked at Thomson Reuters in various commercial roles in New York, London and Singapore.
BGC Partners has released fourth quarter and full year results for 2016, which show that revenues were down in both its fully electronic FX and financial services businesses compared to the previous year.
BGC posted Q4 2016 FX revenues of $70.8 million, down 5.8% from Q4 2015, and full year revenue of $303.3 million, down 6.6% from 2015.
The notional volume from its fully electronic FX trading unit was also down year-on-year, dropping 21.8% from $13.4 trillion in 2015 to $10.5 trillion last year.
Capitalab, an entity within BGC Partners, has launched a multilateral portfolio compression service for FX options, as well as for interest rate caps and floors.
Since June 2016, five FX options compression runs have been executed, in USD/JPY and EUR/USD, with the participation of respectively five and seven FX options dealers.
In the last three interest rate options compression runs organised by Capitalab, participants have also included caps and floors, together with swaptions. Caps and floors – options on Libor and Euribor forward rates – are known to be capital intensive, because of their large notionals.
In November last year Profit & Loss reported on an investigation by New York Attorney General Eric Schneiderman into practices and conduct on the FX options desks of three major inter-dealer brokers. Now, according to a report, that investigation is not only ongoing, but it has broadened beyond the original “spoofing” or “flying” of fake bids and offers, into a look at the what may be the inappropriate sharing of market information and the rigging or influencing of market auctions.