Unlocking the Value of FX Data

  With more data available to FX market participants than ever before, the real value is in being able to interpret this data, says Maria Prata, managing director, global FX, at Deutsche Bank in a new video interview with Profit & Loss. Acknowledging that “data” has become something of a buzzword in the FX industry […]
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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,” […]
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Is It Time to Change the Credit Model in FX?

In a new video interview with Profit & Loss Rick Schonberg, global head of ForexClear product development at LCH, is unequivocal in expressing his view that the current credit model in the FX industry is due for a change. “The model definitely needs to change,” he says. “What’s interesting is that the BIS numbers —  […]
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Have Exchange Acquisitions in FX Actually Worked?

Thus far, some of the acquisitions of OTC FX platforms by exchange groups have not proven to be as fruitful as previously imagined, argues David Mercer, CEO of LMAX Exchange Group in a new video interview with Profit & Loss. Casting a critical eye over the competitive landscape in the FX platform space, Mercer makes […]
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The Institutionalisation of Crypto: Patience Required

Institutional investors will start to trade in cryptocurrencies, but the price crash last year has put a hold on their plans. That said, as David Mercer, CEO of LMAX Exchange, which owns the institutional crypto platform LMAX Digital, observes, “All the names you’d expect are looking seriously at crypto.” LMAX Digital was launched into a bear market, something Mercer wryly suggests is something you wouldn't choose to do, but he remains optimistic in the long term. “We set up LMAX Digital purely for the institutional space, but at the moment it is probably at one-to-five percent of its potential – it remains largely retail-orientated,” he says
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Reducing Latency in FX: Necessary but a Challenge

For platforms looking to differentiate on the speed of their technology the equation is measured in the scale of the challenge rather than the opportunity. As David Mercer, CEO of LMAX Exchange observes, “You can’t differentiate on speed, but you have to keep in line with the best in the market – and that means cost.” Liquidity providers have to be able to update their prices as quickly as possible, and likewise, trading venues have to deliver price updates to their customers as efficiently as they can, to facilitate a fair trading environment. “Five years ago market data was being delivered at 100 milliseconds, then more recently it was at 5 milliseconds,” notes Mercer. “At LMAX Exchange we are live streaming and cancel and replace of orders is measured in microseconds, but already people are talking about nanoseconds – and that’s a challenge for us.”
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Making Internalisation Work

Discussing the launch of NEX’s (Nex) new data analytics suite, Tim Cartledge, global head of FX and head of product at NEX Markets, says that it aims to make internalization more beneficial to both liquidity providers and consumers. “The problem that we’re trying to solve is that the relationship between liquidity provider and consumers on a relationship based platform actually doesn’t have much relationship left in it anymore because the way the market has evolved is that the liquidity consumers really don’t know how how the liquidity providers are making that liquidity, they don’t know how they’re holding the risk for an extended period until they find an offsetting client trade. In short, they don’t understand how internalization works,” says Cartledge.
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FX: Still a Relationship Business

As FXSpotstream (FSS) approaches its sixth anniversary its CEO, Alan Schwarz, argues that a shift towards disclosed trading is one of the biggest industry trends that has emerged during this time. In particular, he highlights when the Swiss National Bank (SNB) pulled its peg to the euro – which caused massive volatility in the market – as a catalyst for this trend. “Post-SNB you have Brexit and then you have the US election and there’s been an increase desire –and not only do we hear it but we see it based on the volume growth – for people to know who their counterparty is for credit reasons and market impact has become a very significant piece of the conversation. That’s fundamentally what we’ve seen change,” he says. 
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Does TCA Really Need to be Independent?

Speaking at the Forex Network Chicago conference, Mike Harris, president of Campbell & Company, discussed the pros and cons of independently provided transaction cost analysis (TCA). Pressed on whether a fintech firm being acquired by a larger company is necessarily a bad thing for their clients, Harris pointed to the example of BestX, the TCA provider that was acquired by State Street in August. Harris explained that Campbell & Company partnered with BestX because their TCA product was focused specifically on FX rather than being adapted from equities, and that they were the first to offer peer-to-peer functionality so that firms could opt-in to compare their trades to other people’s, as well generally being at the forefront of the TCA space.
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Blockchain and the Internet: Is it a Good Comparison?

The comparison between blockchain technology and the early days of the Internet is one that is perennially made in articles and at industry conferences, but is it accurate or even helpful? This was the question posed to Cristina Dolan, co-founder and COO of InsureX, and Adrian Patten, the co-founder and chairman of Cobalt, at the Forex Network Chicago conference. “The Internet was a lot easier to deal with because it was a linear process: you had a database, there were users, you had a web interface and although you were still training people how to use the web interface, you could control that whole ecosystem that you put up, you just had to drive people to the page,” said Dolan.
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