The algos will be powered by Quantitative Brokers and made available via 360T’s trading platform across both disclosed and anonymous liquidity pools.

David Kalita & Matt O’Hara

Launched on Monday, the new offering features newly FX-optimised versions of Quantitative Brokers’ flagship algorithms Strobe FX – for schedule-based execution for TWAP and VWAP benchmarks – and Bolt FX – which is an implementation shortfall algorithm built to minimise execution costs relative to arrival price.

The algos have been tailored to FX microstructures that traders have to navigate day to day, David Kalita, chief executive officer at Quantitative Brokers, tells The TRADE.

“Traders are dealing disclosed with market makers that know who they are and therefore are constantly assessing their profitability and monitoring how they’re able to monetise the flow,” he explains.

“A common mistake that we’ve seen other people make in this space is thinking they can achieve great transaction costs on one trade by being really aggressive but then LPs [liquidity providers] widen out their pricing and tomorrow that price is no longer available.”

He explains that the new algorithmic offering launched today has a codified workflow that attempts to find a middle ground that supports both parties involved in a trade.

“We’re trying to find the happy medium where our LPs are being properly treated and getting reasonable flow that they can monetise at a healthy level and we’re still being able to achieve good transaction costs on any particular trade,” he says. “Finding that long run equilibrium between the two so you’re not sweeping across multiple LPs and you’re not being hyper aggressive is essential.”

In the coming months, Kalita confirms that two additional algos will also be launched to complete the suite. One targets the benchmark prices at the close, named Closer, and a more aggressive algo which is meant for more people that want to get done in 10-15 seconds, named Octane.

When asked why the pair had chosen now to launch their suite, the answer was simple: client demand.

“There has been growing demand for alternative algo solutions in the foreign exchange market particularly provided by independent third party providers who offer algo execution logic that points to various different curated pools of liquidity,” chief executive of 360T Americas, Matt O’Hara, tells The TRADE.

The executives explain that the pairing of Quantitative Brokers and 360T makes sense for several reasons. 360T has connections to many of the key non-bank market makers.

It also claims to offer unique data available in spot and in swaps around historical market pricing.

“That’s been very useful for us to assess not only our strategies but also use in our algo logic to make sure we’re executing good prices in a non-toxic manner,” says Kalita.

Deutsche Börse

360T and Quantitative Brokers are both owned by Deutsche Börse, acquired 10 and six years ago respectively.

“It is a great construct because we have the backing of the group which has fantastic brand reputation scale distribution but the group companies can retain their DNA, culture, be very customer centric, very innovative very entrepreneurial,” adds O’Hara.

360T has undertaken several other partnerships under the Deutsche Börse umbrella, O’Hara explains.

“360T partnered with Eurex to deliver FX futures through 360T’s distribution networks. 360T also produced some unique market data content sets focused on support swaps and forwards that are available through the Deutsche Börse market data services business,” he says.

The algorithms launched today were created and are powered by Quantitative Brokers.

There is scope for Quantitative Brokers to explore partnerships with other platforms in the future, Kalita confirms.

“Of course, QB has other clients and they potentially use other providers and so we’ll evaluate that as a needs must basis but right now this is available on 360T and we think that the product is going to be really strong particularly with this partnership,” he concludes.

The post 360T strikes deal to host new Quantitative Brokers FX algo suite appeared first on The TRADE.

Uday Chebrolu, FlexTrade

LoopFX is a liquidity venue which offers dark mid-point matching for asset managers and banks, specialising in large trades in excess of $10 million. 

Meanwhile, FlexTrade’s FlexFX solution can be deployed as a standalone solution or as a fully integrated component within FlexTrade’s multi-asset execution management system, FlexTRADER EMS.  

“The FX space is continually evolving, with innovative new solutions emerging that can positively impact trading efficiency and performance,” said Uday Chebrolu, head of FX and digital assets at FlexTrade Systems.  

“Integrating LoopFX into our platform gives our clients using FlexFX access to liquidity for large FX trades, enabling them to optimise their execution process while minimising market impact.” 

The new initiative from the two firms will enable mutual clients to access LoopFX’s matching functionality within their existing workflows in FlexFX.  

In addition, asset managers are able to send orders directly from the FlexFX order blotter to LoopFX, with no development work or changes to their workflows.  

The data available within FlexFX can also add value through sending trading performance data to FlexTrade’s transaction cost analysis tool, FlexTCA, to perform analysis to optimise execution quality.  

The business added that it plans to expand the integration further, combining FlexFX’s automation capabilities with LoopFX.  

“FlexTrade continues to show a client-first approach by providing its growing client base with direct access to LoopFX functionality within its existing workflows,” said Blair Hawthorne, founder and chief executive of LoopFX. 

The post FlexTrade and LoopFX integration set to optimise FX trading capabilities appeared first on The TRADE.

The new version updates its principles of good practice in the foreign exchange market in two key areas. Alongside the revised code, GFXC stated that it will also publish enhanced Disclosure Cover Sheets (DCS) for liquidity providers and platforms.

The code was updated following an extensive consultation process with local FX committees (LFXCs) globally as well as a wide range of market participants through a public request for feedback in October 2024.  

At the time, however, the Foreign Exchange Professionals Association (FXPA) labelled the updates “well-intentioned but flawed”, namely due to the overly complicated language used in the proposals and the lack of practical detail. 

Read more: FX association calls out proposed FX Global Code revisions for ‘complexity and lack of clarity’ 

Following the consultation process, updates have been made to five of the code’s 55 principles to strengthen guidance around FX settlement risk and increase transparency around certain FX transactions and the use of client data on electronic trading platforms. 

Elsewhere, the DCS for liquidity providers and platforms were also extended, aiming to improve transparency and comparability across providers on the use of FX data.  

“We welcome the code’s continued emphasis on mitigating FX settlement risk via PvP [payment vs payment] mechanisms and automated netting solutions, using the ‘risk waterfall’ concept as a best practice approach,” said Marc Bayle de Jessé, chief executive at CLS.  

“The principles outlined in the code are critical for reducing systemic risk while enhancing resilience and efficiency in the global FX market.” 

As part of the updated FX Global Code, it becomes essential for trading platforms to disclose how they use data from client transactions, especially with respect to order handling, fees, and post-trade reviews. 

Elsewhere, there has been an establishment of a “hierarchy of settlement methods” and a risk waterfall approach, to tackle settlement risk.  

“The updates to the global FX code are a significant step forward in enhancing transparency and reducing risk in FX markets. It is now incumbent upon firms to use the next 12 months to implement the available solutions to facilitate PvP settlement,” said Alex Knight, head of EMEA at Baton Systems.   

“Even where PvP settlements aren’t yet available, most firms still have an opportunity to deploy technology to further de-risk their business through the use of real-time information to track and orchestrate settlements in a controlled manner, and to reduce the volume of business that is settled gross.” 

Firms have been given a “sufficient” 12-month period by the GFXC to comply with these changes, which have been created with the aim of improving transparency, efficiency, and risk mitigation in FX markets. 

Following the code review, GFXC chair, Gerardo García, commented “there has been strong GFXC support for the final proposals of the FX settlement risk and FX data working groups.  

“The code amendments clearly address the concerns that market participants and LFXCs expressed during the review process and are consistent with the objective of having a more robust and transparent FX market.”  

Basu Choudhury, head of trade lifecycle strategy at OSTTRA, highlighted that the updated FX Global Code “rightly prioritises” the mitigation of settlement risk and liquidity –which he noted as pressing challenges within the FX market.  

“We see this as a pivotal moment to ensure market participants not only manage settlement risk but also optimise their FX liquidity comprehensively,” he said. 

“Only by integrating tools to facilitate full visibility of exposures from point of execution with effective netting protocols and intraday FX PvP can firms be empowered to navigate future FX settlement challenges with greater confidence and precision.” 

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As we look ahead to 2025, we see it as a transformative year in how and what we trade. A convergence of trends is set to disrupt traditional norms and create opportunities for those that are thinking ahead. 

Our members tell us their industry is adapting to the pressures from indexation, prompting strategic mergers to achieve scale, and diversification into asset classes such as fixed income, derivatives, interest rate products, energy and commodities. This evolution demands agility from dealers who are being asked to adapt, creating opportunities to diversify skills and foster the exchange of specialist knowledge. 

The liquidity and market structure landscape across asset classes is also shifting. New entrants are reshaping traditional markets like equities and creating new ones like crypto. The dominant delivery mechanism for this liquidity will be electronic and automated. For our members, the challenge will be navigating these new sources of liquidity while applying common best execution principles to the process. For asset managers, maintaining quality execution expertise in this changing landscape will be critical for sustained fund performance. 

Andy Mahoney, managing director, EMEA, FlexTrade  

Market structure across asset classes has started to cross-pollinate increasingly, with workflows widespread in one asset class now cropping up as “innovations” in others. The overriding theme that will develop significantly in 2025 is the desire to connect liquidity providers with consumers in as direct a manner as possible.  

We’ve already seen the first signs emerging in 2024 with the rise of direct-to-buy-side connectivity, where liquidity providers of various types create private, curated price streams for the buy-side, who can then engage at their discretion. For some providers, notably those born in the deeply interconnected world of FX, this is nothing new, and they come with the native ability to widen spreads in response to various factors. For others, disclosing closely held liquidity is a more uncomfortable proposition, which is where technology providers will need to step up in 2025.  Reducing the information asymmetry between liquidity provider and consumer will be critical to enabling both sides to engage willingly.  

As this trend evolves, having a single entry point to the market – regardless of asset class – will become crucial. Lessons learned from one asset class can be ported to others without reinventing the (algo!) wheel. A flexible automation framework capable of operating across asset classes while observing the nuances of each will enable firms to transition to the long-anticipated model of a “true” multi-asset trader.  

Chris Bruner, chief product officer, Tradeweb  

The end of 2024 finds markets more interconnected than ever, as technology continues to shape multi-asset class execution in response to increasing demand for a unified, one-stop approach to trading across different products, geographies and client channels. This development has helped prime financial markets for the advent of a distributed ecosystem that democratises global financial markets and facilitates seamless, efficient and scalable interoperability for market participants.    

As investors continue to seek greater exposure to digital assets, emerging technologies such as blockchain could further drive electronification across newer adjacent markets. We will, therefore, be focused on exploring how these technology solutions could be harnessed in different regulatory environments to meet growing market demand.   

Bianca Gould, head of fixed income and equities EMEA at BNY  

Consolidation within the industry has increased the focus on operational efficiencies and we see this trend continuing into 2025. Clients are looking to reduce the overall number of partnerships they need to maintain. BNY’s multi-asset execution offering, with an execution-to-custody proposition and middle office support, is well-positioned to solve for many of our clients’ challenges across the trade lifecycle by utilising our trade execution solutions.  

BNY is working across the enterprise globally to enhance our ecosystem to be more for our clients. As the industry continues to focus on this topic, BNY is innovating to ensure that in addition to providing our core trade execution function, we can offer various operational efficiency solutions. 

Kevin O’Connor, global head of sales, portfolio solutions, State Street Global Markets   

State Street’s industry research in 2024 revealed that outsourced trading is an emerging trend that is providing users with a distinct advantage over the rest of the market. Those research findings provide proof of the many benefits of outsourced trading including efficiency gains, cost reductions, and improved investment performance. It’s no wonder then that we found from our survey of 300 global institutional investors that the vast majority of current users are “satisfied” or “very satisfied” with their experience and plan to expand usage.     

As we move into 2025, State Street expects to see greater adoption and global expansion of outsourced trading especially by larger firms in search of higher investment returns and cost efficiencies.  While we expect adoption across regions, expansion plans are particularly prevalent in EMEA, and according to our research, funds of all sizes are planning to expand their use of outsourced trading in that region.  We also expect to see more firms expand their usage across asset classes, outsourcing more complex asset classes such as derivatives, foreign exchange, and swaps.

The post The TRADE predictions series 2025: The cross-asset perspective appeared first on The TRADE.

The race to redefine FX trading is on. According to the recent Coalition Greenwich report, multi-dealer platforms (MDPs) are poised to overtake single-dealer platforms (SDPs) in spot FX trading in 2025 – a stark reversal of recent years where SDPs dominated. 

Amid these changes, banks need to adapt so they can meet their clients wherever they are and deliver on best execution requirements. To get ahead of the competition, banks need to upgrade their technology to enable faster price discovery, bespoke price creation and improved risk management. At the same time, we’re seeing more sophisticated buy-side firms utilising API first architecture to directly embed banks’ services and functionalities into their own workflows, creating new opportunities for dealers, provided they have the right technology.  

The message is clear: future success hinges on mastering MDP, SDP and API trading ecosystems. The key lies in leveraging venue-neutral, multi-channel technology to build a robust distribution platform. From there, banks can focus on delivering a unique trading experience tailored to their clients – on any platform, in any environment. 

Mark Suter, executive chair, Digital Vega 

In 2025, we expect the see the FX options market automate further, with more regional and private banks implementing workflow automation technology solutions. As their clients want to trade electronically and trade sizes reduce, many banks are having to implement technology to manage a larger volume of price requests and more tickets to process. A key focus for Digital Vega in 2025 is to continue to roll out our white label electronic platform to client banks. This increases workflow efficiency and capacity, and also allows banks to price trades themselves or source prices from our multibank platform, which enables increased currency coverage. 

Next year will also see the full production launch of our FX options CLOB. We have spent a long time developing the platform and conducting client testing but held back from a full launch until we could rely on deep liquidity on day one. Now we have most of the main trading firms connected we expect to launch in early 2025. As the CLOB makes interdealer trading more efficient we think that the whole of the FX options market will benefit from increased liquidity and overall volumes will grow as a result. 

Stephan von Massenbach, chief revenue officer, DIGITEC 

The FX swaps market is migrating to electronic channels, and we expect the pace of change to continue through 2025. Clients want to trade FX swaps in multiple currencies, and tenors beyond overnight and tom-next, and banks will only be able to service clients efficiently by implementing scalable technology solutions, where workflows are largely automated – in data, pricing, distribution, and settlement. Also, the velocity of the underlying market has increased which means that banks using Excel to manage their FX swaps books are now turning to technology solutions to keep pace. SaaS technology deployed in the cloud has reduced the investment required to provide accurate and fast FX swaps pricing. 

Interdealer FX swaps trading, which is dominated by the broker market, has begun to migrate to electronic venues, like 360T SUN and LSEG Forwards Matching. We expect more volume to migrate to electronic channels in 2025. 

David Mercer, chief executive officer, LMAX Group 

The foreign exchange (FX) market remains a cornerstone of global trade, yet its pace of innovation lags other areas of capital markets. Despite representing the lifeblood of international economies, significant portions of the market remain untouched by the latest technology and innovation. This leaves ample opportunity for modernisation through blockchain technology as we see increasing fusion between TradFi and decentralised finance.  

Simplified and automated solutions could transform FX, enhancing global price discovery and market access. Looking ahead, there is enormous potential for decentralised models to reshape FX as we know it. Tokenisation would facilitate more dynamic and transparent trading, addressing inefficiencies and increasing participation from diverse players. As sovereign nations strive to maintain control over their currencies, FX innovations can bridge the gap between national interests and meet the demand for a seamless global marketplace. 

The post The TRADE predictions series 2025: Foreign exchange appeared first on The TRADE.

Bloomberg’s foreign exchange electronic trading platform (FXGO) BMatch solution will provide spot matching functionality to the local interbank community for US dollar against the Nigerian naira.

The solution allows anonymous orders to be placed into a central limit order book, which are displayed and then matched with counterparty orders based on mutual trading limits and other specificities from each bank.

Banks can integrate the offering with their middle- and back-office systems.

Bloomberg added that consolidated trade statistics can also be calculated and made available to the market.

“We are pleased to partner with Bloomberg at this critical phase of the FX market reforms being undertaken by the CBN to enhance the price discovery process with the adoption of the Bloomberg BMatch, a more efficient FX pricing system in the market”, said Omolara Omotunde Duke, director of financial markets at CBN.

“The BMatch will provide a robust oversight function for the central bank’s market surveillance activities and deliver better transparency on the prevailing market determined exchange rate. This will be supported by the adoption of the Nigeria FX code by market participants to promote ethical FX market activities.”

FXGO is Bloomberg’s multi-bank FX trading solution providing access to liquidity through real-time pricing, workflow solutions and analytics for price takers worldwide to negotiate FX transactions with their bank relationships.

FXGO offers streaming or RFQ for spot, outrights, swaps, NDFs, deposits, precious metals and options in any currency pair and tenor, alongside providing access to algorithmic order solutions from over 30 providers.

“We are proud to support CBN with our tailored BMatch solution and deliver with it increased transparency, liquidity and efficiency for the Nigeria FX markets,” said Tod Van Name, global head of FX electronic trading at Bloomberg.

The post Central Bank of Nigeria taps Bloomberg BMatch solution for interbank FX trading appeared first on The TRADE.

We need to take a step back and look at today’s trading desk. By dissecting a trading desk into its functions, processes, and tasks, it becomes clear that 80% or more can be successfully automated with today’s technology – and that figure is just for the front-office, potentially even higher in the middle- and back-office. We first need to envision how the job will evolve in the coming years. I envision the trader’s role converging into a multifaceted position where responsibilities traditionally spanning from the front- to the back-office will be seamlessly integrated and executed with the aid of technology.

These technological advancements will profoundly impact our industry and give rise to a new kind of role: the “domain jack of all trades.” In other words, traders will likely become more akin to product owners. Being a market expert and knowing all the ins and outs of trading will no longer be sufficient. Instead, we will need to be familiar with all aspects of the business, from legal and settlement processes to transaction cost analysis and trading. This implies that fewer people will be needed to run a trading desk end-to-end, with more operations running as a one-man show, relying on the interaction of a human and a multitude of specialist systems or AIs. 

So, what are the skills of a domain jack of all trades? 

By definition, many, but the key ones I believe will be relevant are: 

Project Management Skills: The ability to manage multiple tasks, prioritise efficiently, and oversee the implementation and maintenance of automated trading workflows.

Adaptability and Curiosity: Flexibility to adapt to new market and regulatory conditions. A continuous drive to learn about every single corner of the business and market. This adaptability will be essential in an environment where change is constant and rapid.

Technical Skills: While traders may not need to program large-scale applications, the ability to retrieve and analyse data will remain vital. Skills in basic programming or systems knowledge will be necessary for tasks such as manual overrides, improvements, and customisations. Understanding technology will be crucial for validating automated workflows.

Soft Skills: Strong communication skills to convey complex information to diverse stakeholders. Problem-solving and creativity to navigate and innovate within complex systems. A holistic business understanding to see the broader picture and integrate various aspects of the business effectively. This is, and will likely continue to be, a people business, requiring strong interpersonal skills to manage relationships and collaborate effectively.

The interesting aspect of this vision is that no single degree can prepare you for this. It is unrealistic to expect a trader to be formally trained in finance, software engineering, and law to do the job. Therefore, either education will need to become significantly more industry-focused, or firms will have to identify and develop new talents to become the domain jack of all trades.

The trader of the future will be a multifaceted professional, adept at integrating technology, traditional market expertise, and a broad understanding of the operational aspects of the business. This evolution will streamline trading operations, creating more efficient and dynamic trading desks powered by human-AI collaboration.

How can firms ensure that their traders receive the necessary support to do so?

We have two aspects to consider, how our firms will develop domain jack of all trades within the existing workforce and how will we recruit them. In terms of development, I work for an organisation that has successfully cultivated domain jack of all trades for years. What I have seen is that ownership is what transforms a great employee or trader into a do-it-all, all-terrain expert; giving more responsibility and freedom only brings the very best of people as far as the firm’s mission is clear to everyone in the organisation, which is the case of NBIM – with the added advantage of having a common goal.

As a trader, this ownership can mean taking full responsibility for an asset class and/or a region. This includes managing counterparty relationships, overseeing internal processes, making key decisions, and communicating across various stakeholders. Effectively, you own a start-up within a larger organisation. This setup naturally drives innovation, improves how things are run, and maximises returns. Because of this, I believe that firms with a flatter structure are better positioned to foster ownership and hence develop successful domain jack of all trades.

Additionally, rotations or secondments across all seniority levels have been widely popular and highly effective tools. They not only support the development and future-proof our workforce but also cross-pollinate best practices. This exposure to different parts of the business helps traders develop a broad skill set and a deep understanding of the entire trading operation.

The other aspect is how do we recruit domain jack of all trades. It is obvious that the old-school interview rounds, and brain teasers and esoteric questions are no longer relevant. Hiring will likely become a lot more expensive. New grads will probably be hired from summer internships or similar programs where we can evaluate individuals over a longer time horizon. Finding well-rounded candidates for trading roles will be very difficult with short hiring processes.

How do you expect traders to adapt to software engineering requirements in the future?

The claim that traders will speak the language of software engineering is becoming increasingly true. However, it’s essential to understand that software engineering encompasses much more than just programming. While AI might handle the bulk of coding tasks, there will always be a need for scripting and integration. If we consider the trader as the conductor of an orchestra of AIs, the need for software engineering becomes much more apparent. The trader, as the domain expert, will need to resort to engineering principles to design and aid in the development of trading workflows and systems.

Traders of the future will need to develop a robust understanding of engineering principles to collaborate effectively with technical teams and machines. This shift will enable them to design, develop, and manage complex trading workflows, leveraging the full potential of AI and automation. As the conductor of an orchestra of AIs, the trader’s role will evolve to integrate technical expertise with market knowledge, driving innovation and efficiency in trading operations.

In your Oxford style debate, your opponent is arguing AI will fill the role of coding and traders will go back to the phones – what do you think will happen?

I think Armon-Jones uses the phone as an analogy for the business getting even more relationship based. With increasing process and decision-making automation in trading, I cannot see this evolving in that direction – unless the trader makes a script to instruct the systems to route volume based on what broker took him/her out for lunch that week, in which case the trader would need to know how to program!

If voice trading is supposed to save the role of the traditional trader, we should see this role growing significantly over the next couple of years. Unfortunately, the opposite is true. Looking at current trends and how the future is shaping up, there will be a reduction of workforce at the trading desks. When that reduction of personnel required to run a trading desk becomes its minimum, it will converge to the trader as the conductor of an orchestra of AIs or the “domain jack of all trades”. It sounds scary, but also it opens lots of exciting possibilities and new roles in the industry.

The post The future role of the trader as product owner appeared first on The TRADE.

CCS trades have notable settlement risk exposure linked to the high value of the initial and final principal exchanges. Settling these trades on a gross bilateral basis also results in operational inefficiencies and liquidity constraints.

The CCS service can be used in conjunction with post-trade processing platform MarkitWire to integrate CCS flows into CLSSettlement, providing the ability for participants to benefit from multilateral netting against all FX transactions.

As a result, this leads to an optimisation of liquidity, alongside a reduction in daily funding requirements.

“We look forward to leveraging CLS’s CCS service to optimise liquidity and mitigate settlement risk,” said Pierre-Jean Benazech, global head cross CCY swaps trading at Société Générale. 

“The unique PvP settlement system and netting capabilities mark a positive step forward in our efforts to optimise our foreign exchange operations.”

Read more: Barclays connects to CLS’s cross currency swaps service

The service has experienced exponential growth, with the values of CCS submitted to CLSSettlement up 87% year-on-year in Q3 2024.

CLS added that the growth in its service also supports the efforts of policy makers and regulators who promote broader adoption of payment-versus-payment (PvP) mechanisms to reduce FX settlement risk and systemic risk in the OTC derivatives market.

“We are delighted that Société Générale has gone live on our CCS service. Participation in the service underscores its effectiveness in enhancing operational and liquidity efficiencies for CCS trades,” stated Lisa Danino-Lewis, chief growth officer at CLS.

“The growing adoption of this service as well as the growing values submitted indicate that FX market participants are actively pursuing innovative solutions to further reduce settlement risk and improve operational efficiency.”

The post Société Générale connects to CLS’s cross currency swaps service appeared first on The TRADE.

A new report from Coalition Greenwich found that buy-side comments with respect to MDPs reflect that the ability to access dealer quotes while keeping them in competition, helps optimise trading.

The growing use of MDPs from the buy-side is driving electronic trading overall and supports their growing focus on best execution.

Over the next year, 34% of respondents stated that their use of MDPs would increase, while conversely, only 5% thought there would be a reduction.

Comparatively, only 16% stated they would increase their use of single-dealer platforms, with 24% stating they would reduce their use of SDPs.

The usage of manual forms of trading, such as chat and voice, are also anticipated to decline, with 23% expecting to decrease their use of chat and 31% decreasing their use of voice in the next year.

“Using electronic execution methods provides value beyond a single trade execution. For example, it is easier to store and capture data about the bids received from dealers when receiving them electronically,” said Coalition Greenwich in its report.

“This ultimately helps a buy-side firm evaluate a broker, whether they executed a particular trade or not.”

When evaluating a firm’s panel of dealers, a buy-side desk may take into consideration various reasons why it may redirect its flow from one to another. Coalition Greenwich found that there were two key reasons why a trader may reduce flow to a dealer: namely, pricing and quality of institutional coverage.

When asked why the buy-side might redirect trade flow, just over 40% of respondents noted pricing as a key consideration. This comes as no surprise with growing concerns from the buy-side about best execution and investments in tools such as TCA to help evaluate their counterparties.

The quality of sales and relationship management was the second highest reason noted by respondents, with 22% citing it as an important element.

The common thread connecting the FX discussion on dealers and MDPs is competition. End users want their dealers in competition with each other to both receive favourable pricing on individual trades and reduce dependence on an individual counterparty, noted Coalition Greenwich.

Elsewhere in the report, Coalition Greenwich found that single-dealer platforms (SDPs) will continue to play a role in the FX trading ecosystem, particularly for complex trades and structures.

However, it was noted that MDPs are likely to remain the preferred choice for routine trades and spot execution.

“MDPs offer a range of benefits, including ease of use, workflow integration and best execution,” said Stephen Bruel, senior analyst on the Market Structure and Technology team at Coalition Greenwich.

“They are an attractive option for buy-side traders who want to optimise their trading and achieve best execution.”

The post Usage of multi-dealer platforms expected to increase as FX traders seek best execution appeared first on The TRADE.

Munenori Yoshihara, BBH

The development sees Resona become the first Japanese investment manager to implement the FX solution.

InfoFX is a securities-based FX solution that enables automated FX order generation with execution netting capability.

The solution provides support for FX orders across multi-custodian accounts and covers both freely traded markets and select restricted markets.

Read more: Fireside Friday with Brown Brothers Harriman’s… Brendan Burke

Following the onboarding of InfoFX, Resona AM added that it has already seen greater operational efficiencies through trade data transmission and FX netting, as well as improved flexibility in their security-based FX workflow.

“With the launch of InfoFX, our fund managers have gained significant benefits through reduced operational burdens. We expect that these operational efficiencies will lead to enhanced investment performance,” said Resona AM.

Resona AM has also achieved improved oversight and control of its FX trading capabilities through InfoFX Live, BBH’s web-based platform which offers clients with robust pre- and post-trade reporting and analytics tools to assess execution quality.

“Global asset managers continue to look for ways to optimise their trading and operational workflows, so we are thrilled to expand upon our longstanding relationship with Resona Asset Management, a key relationship for BBH in Japan,” said Munenori Yoshihara, head of relationship management Japan and markets Asia at BBH.

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