I suppose it’s inevitable when senior people leave that speculation over the future of a business grows exponentially, but even without some of the senior departures, there does seem to be a tremendous amount of buzz around about the platforms.
The public protestations from several CEOs about how they are building a business, not selling one has to be taken with a pinch of salt, after all, why would they publicly show their hand? Some are obviously genuine, but most would at least listen to an expression of interest, no matter how vague it was.
The past year has seen me become increasingly irritated by platforms answering my call to help police bad behaviour in the Global Code era by saying either it’s not their responsibility or it’s an impossible request - so here's one area they can do something about. There are reasonable reasons for asymmetric price improvement data and - at a stretch - for asymmetric last look policies. But asymmetric response times? That's a whole different matter and something needs to be done now.
Less than two weeks ago I discussed platforms raising brokerage rates and made the observation that “I don't see why FX market participants shouldn’t pay a small amount more brokerage given the level of investment by several platform providers over the last year or two”. I also observed that if customers do complain about higher brokerage then the providers will at least know that they care little about the level of service they are getting as long as there is a price and the bro is low.
Well, I can report that early feedback is that I was dead wrong on the first and spot on with the second!
Galen Stops is back on duty for this week's In the FICC of It podcast and he and Colin Lambert have a lot to get their teeth into. Starting with a response to Lambert's question from episode 37 as to why the Cartel were in a chatroom anyway, our podcasters discuss the throwing out of the case against former Barclays' FX head Robert Bogucki in the US. Staying with that bank, they then discuss a website set up by Barclays' former head of automated trading David Fotheringhame that is "a public defence of last look". Listeners will be glad to hear that Lambert doesn't bang on for too long on one of his favourite subjects, preferring instead to move the conversation onto exchange in FX, with the question, "will scale ultimately win the day?"
Over the years the most powerful criticism aimed at e-commerce and its potential impact on markets has not been about volatility, or market behaviour generally, it is its lack of flexibility – why else, for example, has the FX swaps market not become more automated in recent years? This is a genuinely intriguing question and whilst in the past it was hard to see how it could happen - thanks to resistance on bank and broker side - now I am definitely picking up a different vibe.