Consider this scenario: Youre travelling for business when you receive a message from your broker mid-way through your flight (its a fancy new Boeing that doesnt blow an engine when you check your email). The heads of the Eurozone have struck up an agreement on Greeces new bailout. Hooray!
As FX volumes continue their stratospheric rise, an increasing number of brokers and other financial firms are exploring different methods for dealing with liquidity sourcing and distribution. Prime of Prime Brokerages or PoPs is an increasingly popular option for retail brokers looking to effectively manage the problems brought about by spiralling volumes, with a long term view to reaping their maximum benefits. But what, exactly, can be accomplished through the use of PoP, and how does the broker decide on which PoP service is most suited to their business requirements? TopFX makes the case for PoPs.
Isnt the biggest global financial market actually in a good shape?
Nichada Katchamart, Back Office Product Manager and Mark Biezup, FX Product Manager, at SunGard Sierra discuss the need for flexibility in preparing for Dodd-Frank.
Squared Financial Services Ltd (SFSL) launched its platform in 2005. At that stage, electronic trading especially on the FX side was changing rapidly. Like many asset classes in the electronic space - both OTC and Exchange based, FX was becoming more efficient and user friendly at a rapid pace. The origins of this transformation predate the NASDAQ ECNs by many years, and as it accelerated eventhough the equity and futures markets adopted transparent centralized trading more completely, it could be argued that FX, due to its range of products, trading models and participants was approaching true global price discovery more rapidly.
There has been renewed emphasis on straight-through processing (STP) of FX transactions, arising from the need to handle an ever increasing volume of transactions, manage risk and gain operational efficiency. STP often relies upon enterprise application integration (EAI) techniques to facilitate the flow of data across disparate systems. However, such techniques alone are inadequate when the broader context of business agility, flexibility and efficiency is considered; giving rise to adoption of technology that goes beyond the traditional data-centric EAI methodologies. Service Oriented Architecture (SOA) and Business Process Management (BPM) extensions, including business aligned process-centric workflow definitions and orchestration of services, have the potential to further streamline STP workflows, thereby improving overall business operations and procedures.
The recent credit crisis has resulted in a dynamic shift to the banking industry by opening new opportunities for regional banks. While traditionally focused on serving the domestic needs of local customers, regional banks today are targeting and supplying a broader array of services.
As the FX market continues to grow in volume and in participants, it is becoming increasingly competitive on the trading side and much harder to derive the same level of profit as in the past. As a result, the financial world is facing pressure to decrease the cost of processing transactions. There has never been a more appropriate time to highlight the importance in ever higher volume back-offices of the need to streamline operations and maintain an efficient Exceptions Management process.
Mark Biezup, FX product Manager - SunGard Sierra, outlines why recent and projected regulatory changes along with a focus on risk management will have significant implications for FX brokers.
The forex market has been changing rapidly, with the emergence of FX as a legitimate asset class for financial investment and speculation, the rapid growth of electronic marketplaces, and more recently, the introduction of algorithmic trading. These trends have pushed the technology curve, demanding more sophisticated tools to optimize results.
New and seasoned participants in the burgeoning foreign exchange (FX) market continue to leverage electronic trading platforms. Whether they are money managers in search of better fund performance or banks in need of cost-saving efficiencies, users are seeking particular electronic FX (e-FX) functionality and benefits. The best products and providers offer access to liquidity, improved cost and time efficiencies, better price transparency, greater stability, error reductions, enhanced auditability, and smooth integration with existing in-house systems.
Seamless connectivity and STP are becoming increasingly important in the FX market. Stephen Yerkes, Director of ASP Services, Sierra, SunGard, explains what users should look for in a system that can meet these vital demands
FX E-commerce for Private Wealth Management is gaining strength as firms look at ways to expand their product offering to clients in a more constructive and efficient way. Breadth of product is an essential ingredient in being a complete and effective Wealth Manager which is why more and more firms are looking at ways to fine tune both the product selection and delivery in many cases looking to an open architecture framework to meet these needs. In addition, FX as an Asset Class is getting more attention as clients look to diversify away from more traditional asset classes and build a more diversified portfolio. Clients are also increasingly taking control over their own product selection and seeking tools which enable them to act independently. These factors put together are creating a growing demand for FX Ecommerce products.
Interdealer-broker ICAPs Jim OHagan, Global Product Manager for EBS Market Data, discusses the crucial role historical market data plays in developing more reliable FX trading models and strategies.
Over the last five years, many FX banks have discovered that they can make more money with less risk by outsourcing market-making. Justyn Trenner explains why we are now ready for a new stage in this evolving process.
The FX market continues to evolve like never before, despite a trending decline of volatility, the volumes continue to grow. Prime Brokers continue to be challenged in terms of identifying and responding to client demand, supporting all available alternatives, and continuing to provide a superior client experience.
Chip Lowry talks about Price, Process and STP.
Kenny McBride talks about e-Trading driving the need for integrated innovation.
David Ogg discusses how the aggregation of portal and single bank liquidity will provide a new paradign for improving eFX.
Anish Malhotra illustrates how Bloomberg has gone about fulfilling its vision of offering all components of their product through a single platform for a single price.
Now that the shakeout is abating of a various eFX business models and trading technology what is the standard for todays eFX trading platform and how did it get that way? Harpal Sandhu gives us his opinions in this edition of VIEWPOINT.
The debate in FX Options with respect to electronic trading platforms has focused on whether ownership of a trading platform is desirable from a brokers perspective, and if so, whether an electronic only or a hybrid broking model is superior. Mike Binns at GFI gives us his opinion.
A global custodians foreign exchange team is uniquely qualified to develop and deliver eFX solutions for the global investor. James Crossan describes the contribution they have made in driving eFX developments.
Richard Estes outlines why he believes the continued success of single bank trading systems is playing a strategic role in the growth of online FX.
- The ABN AMRO Experience
The Goldman Sachs experience