Speaking at the Profit & Loss Forex Network New York conference, panellists outlined how they think the application of fintech solutions will shape the FX industry going forward.
Nick Solinger, president of FIA Tech, broke down three specific areas where he sees the potential for distributed ledger technology (DLT), or peer-to-peer technologies, to have a major impact on the FX industry.
Firstly, he highlighted how these technologies could change payments systems.
“The current market structure has been the primary limitation in terms of who can provide credit to whom and trade with whom and access the market on the same basis as a large, highly regulated dealer. So there is a focus on improving the payment network, and that will have potential implications upstream in terms of who can trade with whom,” said Solinger.
FIA together with affiliate FIA Tech, today announced new technical guidelines for firms to properly identify the correct brokerage when executing and clearing exchange traded derivatives.
With the proliferation of execution services, platforms and providers there is increased need for clarity in how to communicate a trade’s execution method through industry standard codes, the groups said in a statement. Brokerage discrepancies are one of the largest causes of operational friction in the reconciliation of exchange traded derivatives, and lack of standardisation has created significant costs for clearing firms and their clients, they noted, adding that by working with FIA’s membership as well as FIA Tech’s global customer base, “the industry has devised standard codes for commonly used execution methods”.