In April this year, Traiana and CLS announced a joint venture to provide trade aggregation services to participants in the over-the-counter (OTC) foreign exchange markets. The aim is to reduce operational risk, rationalise and consolidate legacy back-office processes, and reduce post-trade costs in the global foreign exchange markets, at a time when volumes have increased substantially. Jesse Drennan, Director Product Strategy, Traiana, explains why post-trade processing in FX demands reinventing.
The last five years have been marked by an unprecedented explosion in foreign exchange trading volumes, and even with recent reports showing a decline in volumes from certain segments, the impacts of higher volumes are still felt across the industry. Furthermore, reports make it clear that the transition of foreign exchange into an asset class by a widening group of institutional and retail investors is here to stay. The growing volumes from these new segments are a measure of the change, but underneath the volumes is a richer story of the transition of FX into a mature asset class.