Institutional Crypto is Coming

Major financial institutions will move into the crypto space, despite the fact that many of them have avoided it thus far, argues David Mercer, CEO of LMAX Exchange Group, in a new video interview with Profit & Loss. “We’d be kidding ourselves if we said the last 12 months haven’t been static in crypto land,” […]

LMAX Digital Begins Publishing Daily Volumes

LMAX Digital, the spot cryptocurrency exchange owned by LMAX Exchange Group, has started publishing its daily trading spot volumes on the exchange’s website. The firm says that its decision to start publishing its volumes will add greater transparency around real spot volumes traded daily in the industry. The volumes represent all trades based on credit […]

Cryptocurrencies: Finding the Right Audience

Since the price of crypto assets spiked dramatically in 2017, many have been predicting that a wave of institutional money is going to come into the cryptocurrency market, bringing with it a flood of change.  However, speakers at Profit & Loss’ Forex Network London event argued that the “institutionalisation” of the crypto markets will play […]

Credit, Not Custody, the Biggest Challenge in the Crypto Space

David Mercer, CEO of LMAX Exchange, talks about why a lack of credit, rather than custody solutions, is the biggest single challenge facing institutional market participants wanting to trade cryptoassets.

LMAX offers a crypto custody solution through LMAX Digital, and Mercer concedes that having platforms provide custody services is not necessarily ideal from a market structure perspective.

However, he quickly adds: If you look at LMAX Exchange’s business model I’ve always been regulated as a broker-dealer and I’ve alway been regulated as an MTF and there’s Chinese Walls between the two.

LMAX Global Liquidity Now Available Through Kx Platform

LMAX Global, the Financial Conduct Authority (FCA) regulated broker for FX and part of the LMAX Exchange Group has announced that its global liquidity has been added to the Kx trading platform, Kx for Flow.

Institutional clients and brokers, using the Kx for Flow trading UI, will now have access to the broker’s liquidity, spreads and execution with no ‘last look’ as standard.

Rob Brown, international development executive at LMAX Global comments: “We are very pleased to announce the partnership with Kx. The link will offer more institutional clients an enhanced trading experience – delivered through the combination of Kx for Flow leading technology and direct access to trade through LMAX Global on the central limit order book with streaming firm liquidity from top tier banks and proprietary trading firms.”

LMAX Consolidates Ownership with £21.9m Buyout

LMAX Exchange has completed an equity purchase of Paddy Power Betfair’s remaining stake in the business.

The 31.35% stake (or 187,811 shares), bought for £21,945,000, brings 95% of the company under the control of the group’s management.

The equity purchase is financed by a senior debt facility provided by Silicon Valley Bank (SVB), a bank focused solely on the innovation economy. The terms of the loan are not disclosed.

David Mercer, CEO of Lmax. comments: “I am very pleased to be working with Silicon Valley Bank. SVB’s focus on the innovation economy resonates perfectly with Lmax Exchange growth story and future ambition – this creates a solid foundation for our partnership going forward. Having successfully built a global exchange marketplace for FX, our ambition is to continue growing our distribution and propagate the exchange execution model across capital markets.”

LMAX Expands APAC Presence with New Hire

LMAX Exchange (Lmax) has appointed Quentin Miller to the newly created position of head of institutional FX for Asia Pacific.

Based in Singapore, Miller will be responsible for growing the institutional business in the region and will report to Scott Moffat, the managing director for Asia Pacific.

Miller joins from Standard Chartered, where he was executive director of e-trading in Singapore. He has also held senior roles at Commerzbank, RBS and JP Morgan Chase in Singapore and London.

In a release issued today, the firm says the appointment enhances its distribution capabilities in the institutional client segment and builds upon its existing regional presence, which includes a matching engine in Tokyo (TY3), as well as a sales and operational hub in Hong Kong.

Taking a Deeper Look

LMAX Exchange CEO, David Mercer, explains that some market participants need to take a deeper look at their FX execution in order to improve it. 

Discussing the findings of a whitepaper published by LMAX Exchange earlier this year, Mercer says that too often buy side firms only look at fill ratios and spreads to judge their execution quality.

Instead, Mercer advocates using five key metrics provided by each liquidity provider and trading venue being used by that trading firm to judge execution quality.

A Last Look at Last Look?

There is one area of the Global Code of Conduct that continues to attract controversy, and, Colin Lambert says,
we all know what it is…
Although the assessment is a little harsh given the type of misconduct that led to the creation of the FX Global Code of Conduct, it is hard not to understand where the head of e-FX trading at a major bank in London is coming from when they note, “The Code had one job – give us clarity on last look – and it has failed miserably.”

There remains the odd voice still raising concerns about Principle 11 and its apparent endorsement of pre-hedging, however, Guy Debelle, chair of the FX Working Group that created the Code, stresses this Principle is really about the “demonstration effect”.

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